SINGAPORE - The much-reduced board of Axington Inc said a proposed rights issue will proceed as planned, despite five directors quitting amid the controversy surrounding the Bellagraph Nova (BN) Group, a company founded by Axington's controlling shareholders and former chairman.
The two remaining Axington directors, Mr Low Junrui and Mr Roberto Dona, also said in a filing with the Singapore Exchange on Thursday night (Sept 3): "The board wishes to update that the controlling shareholders of the company have communicated to the board that they are still exploring and evaluating strategic options that have been presented to them."
Once it has more clarity, the board will assess the impact and changes, if any, on the proposed resolutions and the postponed extraordinary general meeting (EGM), they added.
On the rights issue, they said there have not been any modifications to the timetable of key events as announced on Aug 21, and the board "intends for the rights issue to proceed as per the timetable".
The Catalist-listed company was scheduled to hold an EGM on Aug 28 for shareholders to approve the rights issue, a name change to NETX and a change in business direction, said to have been "inspired" after a conversation between former United States president Barack Obama and Axington's controlling shareholders, cousins Nelson Loh and Terence Loh.
The Lohs and business partner Evangeline Shen are co-founders of the Singapore-registered BN Group, which grabbed the headlines last month by announcing a bid for English Premier League football club Newcastle United, but became mired in controversy because of revelations ranging from doctored Obama images to inconsistencies in claims and retracted press statements.
Ms Shen resigned on Tuesday as Axington's chairman, along with three other directors, a week after former US ambassador to Singapore Kirk Wagar quit from the board.
Axington shares, meanwhile, have been voluntarily suspended since Monday, "pending the release of announcements in relation to strategic changes to be made in the business direction of the company".
The company, formerly known as Axcelasia, was a provider of professional services like internal audit and quality assurance review, mainly to companies in Malaysia. After it sold its core business in Malaysia to the Tricor Group, it mainly comprised a small business in Singapore and dormant subsidiaries in Laos and Vietnam.
After the Lohs took over the company in July this year, Axington announced a plan to change its core business to providing medical and consumer wellness services, and investments in areas like robotics and artificial intelligence technology. It proposed to acquire Malaysian medical equipment and medical aesthetics products distributor Vesta Apex Trading for $12 million to kick-start this change of business.
Axington also proposed on July 29 a renounceable non-underwritten rights issue of up to 95.2 million new ordinary shares at 10 cents per share, on a one-for-two basis, to raise an estimated $9.4 million for business investments and acquisitions and general working capital.
It also said then that the Lohs’ company, Dorr Global Healthcare, had given an irrevocable undertaking to subscribe and pay in full for its entitlement of 74.2 million rights shares - or 77.9 per cent of the issue - and subscribe and pay in full for all remaining rights shares not taken up by other shareholders.
Among other things, the timetable for the rights issue states that the last day for acceptance and payment for rights shares would be Sept 9, that the expected date for their issuance would be Sept 16 and they were expected to begin trading on Sept 17.