Family of Datapulse's co-founder file requisition notice to oust directors

SINGAPORE - The family of former Datapulse Technology chairman and co-founder Ng Khim Guan is seeking to replace four directors on the company's board and re-evaluate the firm's diversification strategy.

On Thursday (Dec 28), the digital media storage maker said that it has received a requisition notice to convene an extraordinary general meeting (EGM) from Uniseraya Holdings Pte Ltd and Ng Bie Tjin - which have a combined stake of about 16 per cent in the company.

Ms Ng Bie Tjin is the daughter of Datapulse's co-founder Ng. She was previously finance director of the company from 1994 till 2014, and is currently an independent non-executive director of Aspial Corporation and SunMoon Food Company. She is also a director of Uniseraya Holdings.

As the requisition notice was filed on Dec 26, the EGM must be held "as soon as practicable", but no later than Feb 26, 2018, or two months after the company's receipt of the requisition.

In a filing with the Singapore Exchange (SGX), Uniseraya and Ms Ng said that the EGM is for shareholders to consider the removal of Low Beng Tin as non-executive chairman and director of the company with effect from the date of the EGM; as well as Thomas Ng, Rainer Teo and Kee Swee Ann as directors of the company.

These include taking all necessary steps to remove the four from all appointments within the group, its subsidiaries and associated companies, they said.

To replace the four directors, the requisitioning members have suggested the appointment of Ng Boon Yew, Loo Cheng Guan, Ng Bie Tjin and Koh Wee Seng as directors of the company with effect from the date of the EGM.

Another meeting agenda includes an evaluation of the company's diversification and investment strategy to consolidate its business, the filing said.

Among other things, the notice stated that the company shall not carry out any diversification beyond its businesses as at Dec 10, until such time that a complete feasibility study of any proposed diversification be carried out, and that directors take all necessary steps to put into effect the matters set out in the requisition in the best interest of the company, its shareholders and stakeholders.

This comes as Datapulse acquired Wayco Manufacturing for a cash consideration of S$3.5 million earlier this month, and entered into an entirely new business of manufacturing hair care, cosmetics and other homecare chemical products through the acquisition.

Responding to SGX's queries on this deal, Datapulse on Thursday said that it did not conduct due diligence on Wayco Manufacturing prior to the acquisition as its chief executive officer (CEO), Mr Kee, was a former general manager of the vendor, Way Company, and is "familiar with the business and operations of the target company".

It added that under a supplemental agreement entered into on Dec 15, the firm has a right to require the vendor to buy back the target company during the buyback period, if there are any material adverse events affecting the assets or liabilities of Wayco Manufacturing. The buyback period stands at one year from the date of the completed acquisition.

In considering the vendor's ability to fulfil its obligation in the event of a buyback situation, Datapulse said it has weighed in that the vendor is a company incorporated in Singapore with a sizable share capital; and is a "profitable company" to the board's knowledge.

When asked by the SGX why the firm did not appoint its own independent valuer for the acquisition, Datapulse replied that the vendor had agreed to bear the costs of valuation of the properties and that the company was "satisfied with the credentials of the two independent valuers chosen by the vendor".

In mid-November, it was revealed that Datapulse's co-founder and majority owner Ng Cheow Chye, who is also the CEO and executive deputy chairman, had sold his entire block of shares for nearly S$27 million or some 55 Singapore cents apiece. Notably, the sale was done at a 52.8 per cent premium over the closing stock price of 36 Singapore cents on Nov 9 - one day before the sale agreement.

On Nov 23, the buyer's identity was made clear; in a filing, it was disclosed that Ng Siew Hong acquired a 29 per cent interest in Datapulse for nearly S$35 million or 55 Singapore cents apiece on Nov 22 via an off market transaction - about a 28 per cent premium over its stock price then.

On Dec 10, Datapulse's three independent directors, two of whom have served the board since 1994 and 1999, resigned citing change of controlling shareholder.

The following day, two long-standing executive directors Si Yok Fong and Ng Cheow Leng, who is Mr Ng Cheow Chye's brother, also resigned, citing change of shareholder and "board renewal".

Earlier this year, Datapulse had also scrapped an option to buy an industrial property located in Toa Payoh for S$10.5 million which was originally meant as "replacement space" for the group's manufacturing activities, as Datapulse has sold its existing property for S$53.5 million.

The option to buy the Toa Payoh property was terminated as Datapulse's application for the change of use of the property was rejected by the National Environment Agency.

In a separate SGX filing, the company said that it is "currently verifying the shareholding of the requisitioning members, as well as seeking legal advice on the validity of their request for convening of the EGM to pass the aforesaid resolutions".

It added that the board will provide further updates for shareholders when there are material developments on the matter.

As at 11.43am on Thursday, shares of Datapulse were up 10.71 per cent, or S$0.03 to S$0.310 a share. Some 1.8 million shares changed hands.

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