Tensions flared yesterday during Nobel Design's extraordinary general meeting, where board members faced allegations of accounting mistakes and governance issues.
Apart from some pointed questions directed at the management by investors, the firm's former chairman, Mr Bert Choong, was involved in a number of heated exchanges with board members.
The EGM, which was attended by about 20 people, was called to seek shareholder approval for Nobel's revised financial statements.
While the resolution was passed, a number of shareholders and proxies at the meeting questioned whether the original statements were inaccurate. These statements were approved at Nobel's annual general meeting in April but not before several shareholders grilled the board on aspects of the documents, including a potential breach of the FRS 111 accounting standard.
The standard guides the distinction between joint operations and joint ventures, which affects how assets and liabilities are presented on a financial statement.
Investors pressed company chairman Adrian Chan yesterday to admit that there had been a mistake but he insisted there were no internal lapses at the furniture and real estate company.
"We originally treated the joint arrangement companies as joint operations instead of joint ventures based on our interpretation and judgment of FRS 111," Mr Chan said.
But the standard involves a good deal of "judgment call" and is not at all clear cut, he added, noting that the revised financial statements were merely a more appropriate representation.
"After consultation with the outgoing auditors and PwC, we concluded that these joint arrangements would be more appropriately classified as joint ventures. However, the end result remains the same as our earnings per share and net tangible assets per share remain unchanged."
The revision came after a review by PwC, which was asked by Nobel to relook the financial statements following the April AGM.
Nobel will also change its external auditor from Nexia TS Public Accounting to Ernst & Young following shareholder approval at yesterday's EGM.
Those at the meeting - understood to be mostly proxies - were not impressed, with some calling the exercise a waste of shareholders' money and an embarrassment.
One critic, Legal Solutions lawyer Kevin Kwek, demanded that the board specify whether the original statements were inaccurate.
Mr Gwee Peng Hong questioned the competence of Nobel's audit committee, suggesting that committee chair Teh Ban Lian be removed.
But the most vocal participant was Mr Choong, who further blasted the board for what he deemed poor corporate governance, resulting in a heated exchange between both parties.
As Mr Choong persisted with his criticisms, Nobel lawyer Subramanian Pillai attempted to block his line of questioning, citing concerns of sub judice due to the ongoing defamation suit Mr Choong has filed against Nobel's board members.
The lawsuit followed claims by Nobel's board that Mr Choong may have breached his fiduciary duty for not disclosing his son's furniture business in Malaysia.
This led to a brief duel over legal terms before Mr Chan shut down the discussion as governance issues were not on the agenda amid loud protests from Mr Choong.
After the EGM, Mr Choong, who still has around 25 per cent of the shares in Nobel, raised his voice at the departing directors, saying that he will call for further EGMs to move for a vote of no-confidence against the board.
Mr Chan declined to comment on the original statements when he met the media later, saying that the cost of the PwC review was not substantial. He also noted that the company will continue to strengthen its committees, but no staff changes have taken place since the AGM.
Mr Chan said: "Further EGMs will be distracting and expensive. But we are quite confident that the broader shareholder base will be supportive of the board.
"We are trying our best to make sure the business is done properly. We can't stop someone from throwing stones at us."
Mr Choong told The Straits Times: "I have to protect my rights. And if I don't take the stand, what will happen to the smaller shareholders? This is a house which I own 25 per cent, and we can't stay together. Either they go, or I go."