Datapulse sets April 20 for EGM, but proposed diversification may not be up for shareholder vote

SINGAPORE - The embattled Datapulse Technology has set a date for an extraordinary general meeting (EGM) - more than two months after its co-founder's family first launched a bid to oust the board of directors.

The company said on Tuesday night (Feb 27) that it will hold the meeting on April 20, to consider both its proposed business diversification and the proposed change of board.

But it added that, if there is indeed a shake-up in the board line-up, the resolution on the business diversification - dubbed "Ordinary Resolution 9" - will not go to a shareholder vote.

Mainboard-listed Datapulse has been caught in a months-long tussle between a recently appointed board member and shareholder Ng Bie Tjin, the daughter of company co-founder Ng Khim Guan.

Soon after new directors joined in December 2017, the disk-drive maker bought a Malaysian personal-care product manufacturer, Wayco Manufacturing.

It later emerged that the vendor in that deal, businessman Ang Kong Meng, had ties to board members and to a new controlling shareholder of Datapulse.

Ms Ng, who was the company's finance director from 1994 to 2014, has sought to halt that diversification and to replace existing board members with four fresh directors, including herself.

Ordinary Resolution 9 proposes that "approval be and is hereby given for the company to undertake the expansion and diversification of the core business(es) of the group to include the proposed consumer business and/or the proposed investment business".

This would be subject to the company adopting the recommendations set out in the report of an independent review that Datapulse has been mandated to commission.

Ms Ng's requisition notice had called for a different resolution on the business diversification, proposing "that the company shall not carry out any diversification beyond its businesses as at Dec 10, 2017, until such time that a complete feasibility study of any proposed diversification has been carried out, and that any proposed diversification be put before shareholders of the company for their prior approval, and that the directors be directed to take such steps and do all such acts and things as may be necessary or expedient to put into effect the matters set out in this resolution in the best interest of the company and all shareholders and stakeholders".

New directors were appointed on Dec 11, 2017, and the sale and purchase agreement to acquire Wayco Manufacturing came a day later.

Datapulse said on Tuesday that if any of the four resolutions to appoint a proposed director is passed, "there would be a need to reconstitute the board of directors of the company with the appointment of one or more of the proposed new directors"."By not putting up Ordinary Resolution 9 for voting by shareholders at the company EGM, the reconstituted board would be given the opportunity to reconsider the proposed business diversification and decide on the appropriate course of action for the company thereafter," it contended.

But assuming that only one of the four resolutions to remove an existing director is passed, "the majority of the existing board of directors of the company will remain and will be able to implement the proposed business diversification, and accordingly Ordinary Resolution 9 will be put up for voting by shareholders".

Another of the recently appointed directors, Kee Swee Ann, stepped down as chief executive on Feb 2, citing health concerns.

The finalised date of the EGM comes after a protracted back-and-forth between Ms Ng and Datapulse over whether she and family investment vehicle Uniseraya Holdings had the standing to file a requisition notice on Dec 26, 2017.

She eventually turned in a fresh requisition notice on Feb 20, and Datapulse has said that the meeting will be held in accordance with the required two-month window from that latter date.

Bourse operator Singapore Exchange (SGX) has already put Datapulse on notice over the Wayco acquisition that sparked Ms Ng's coup attempt.

It has directed the company to hold a dialogue session with its shareholders in collaboration with the Securities Investors Association (Singapore).

The session was originally to be held on April 17, but has now been moved forward to March 26.

The SGX has also instructed Datapulse to give it advance notice of any possible acquisitions involving the vendor, Mr Ang, and has called for an independent review of the company's internal controls and corporate governance practices.

The Datapulse board said in a statement on Tuesday that it "welcomes the instruction by the SGX, and remains committed to the highest levels of disclosure while seeking to preserve and enhance shareholder value".

It added: "Datapulse's shareholder value has been eroded recently due to the weak operating performance of its media storage business. "The current board is making all efforts to achieve corporate recovery and enhance shareholder value while maintaining good governance.

"The directors look forward to the support of all shareholders as Datapulse navigates a new corporate direction."

Correction note: An earlier version of this article incorrectly stated that Ordinary Resolution 9 is to halt the business diversification. It is in fact to approve the business diversification. The text of the shareholder requisition resolution on the business was provided in place of the text of the company's resolution. The article above has been revised to reflect this. We are sorry for the error.