SINGAPORE - ALL minority shareholders of Shanghai Turbo Enterprises have been called on by the Securities Investors Association (Singapore), or Sias, to vote against the proposed resolution to remove the incumbent board of directors at the upcoming extraordinary general meeting (EGM) on July 24.
Speaking at a meeting between Sias and shareholders of the company, Sias president David Gerald said there appeared to be no legitimate reason for two new shareholders, Lin Chuanjun and Zhang Ping, to remove the current board.
Mr Lin and Ms Zhang together hold a 10.6 per cent stake in Shanghai Turbo. Former CEO and executive director Liu Ming holds 30 per cent.
Mr Gerald said: "If the two requisitioners cannot provide sufficient reasons for the proposed removal, then the attempt to remove the current board is irresponsible and disruptive."
Furthermore, he said the two requisitioners have no working experience as directors or senior management in an SGX-ST listed company and have also not undergone formal training to prepare them for such a role.
Sias said shareholders have two fundamental questions regarding the Shanghai Turbo fiasco. First, regarding ongoing legal actions involving Mr Liu: Why is the lawsuit against Mr Liu to be heard in Chinese courts when the company is listed in Singapore and had raised capital in Singapore from Singaporeans and held AGMs in Singapore?
In addition, Shanghai Turbo is a Cayman Island-registered company and not a China-registered company.
Secondly, it noted that "to shareholders, it appears that Mr Lin, Ms Zhang and Mr Liu may be acting in concert. If that is so, they would exceed the 30 per cent threshold. In which case, they ask, should they not be obliged to make a general offer for the company?
Separately, Allport - which has been a shareholder of Shanghai Turbo since before its 2006 IPO and presently holds about 27 per cent shares in Shanghai Turbo - said it shared Sias' concerns with the current attempt to replace the entire board of directors.
Allport said in a statement: "It is indeed very troubling to see two shareholders, whom we believe had only very recently acquired shares in Shanghai Turbo, joining forces together to call for the EGM and the removal of the existing directors of Shanghai Turbo."
It added that it would like to urge all shareholders to attend the upcoming EGM and voice their concerns, as well as to "exercise their voting rights wisely".
Mr Gerald said if minority shareholders are unable to attend the EGM, they should file their proxy vote by 5pm on July 21.
Correction note: In an earlier version of the article, one of the two new shareholders was identified as Mr Zhang Wen Jun. It should be Ms Zhang Ping.