THE scene is set for a stormy annual general meeting at Chemical Industries next Monday, with an investor raising questions over the lack of shareholder value.
Mr Mano Sabnani, a former editor of The Business Times, told The Straits Times that Chemical Industries' core business is dwindling, the full value of its assets is not being unlocked, and the company has no clear succession plan.
Chemical Industries, an industrial chemicals supplier, has not responded directly to these points.
Mr Sabnani first raised the issues in a forum letter to The Business Times on June 9, calling for other shareholders to attend the AGM to ask these questions and any others. "The company is stuck in a time warp and still operating the same way it was in the 1970s," Mr Sabnani said.
"It's one of those companies with intrinsic better value, but the board is not trying to maximise value for shareholders."
It "has been losing major customers", as these customers are moving out of Singapore. "What is the solution to this? Why isn't the company considering moving to where its customers are as most other companies would do?" Mr Sabnani said, adding that earlier statements from the company did not address these questions.
He also said the rental yield on its properties in Carpenter Street and Upper Circular Road - valued at about $41 million at last count - has been relatively low.
"The question is what the management plans to do with these assets other than sitting pretty and collecting rent of a few million dollars a year. Is there potential for asset enhancement or redevelopment? Who is looking at these opportunities?"
Executive chairman and managing director Lim Soo Peng "has been there for over 30 years and is now probably in his 80s", with no successor in sight, he noted.
The AGM will be held at 10am at No. 3 Jalan Samulun in Jurong.