Fu Yu’s largest shareholder requisitions EGM to oust directors amid poor performance

SINGAPORE – Fu Yu Corp has received a requisition notice from its largest shareholder Victor Lim to convene an extraordinary general meeting (EGM) to pass five resolutions.

Mr Lim, who owns some 29.45 per cent of Fu Yu shares, called for the meeting as he believes a “strategic reset” and reorganisation of the board are needed amid the company’s “poor performance”.

Fu Yu manufactures precision plastic and metal components. Its clients are in the life sciences, medical, automotive, consumer and industrial sectors, according to its website. It is listed on the mainboard of the Singapore Exchange.

The first and second resolutions seek to remove Mr Christopher Huang and Mr Royston Tan as the company’s directors, from the date of the EGM.

“Since the election of Huang and Tan to the board, substantial shareholder value has been erased,” said Mr Lim in his letter on Jan 9.

He noted that Fu Yu’s share price has “dropped steadily” from a high of 33 cents a share in 2021 to 13 cents a share as at Jan 9 – marking a decline of more than 60 per cent.

“The net profits of the company have also deteriorated from approximately $17.6 million in 2021 to a net loss of $10.1 million in 2023,” added Mr Lim, who has been employed by Fu Yu as director of strategy since 2021.

He previously held shares in the company via a fund, but the fund has been wound down and he now holds the shares directly, said Fu Yu in a bourse filing on Dec 19.

Mr Lim’s other three resolutions involve appointing Mr Gilbert Rodrigues, Mr Ralf Pilarczyk and Mr Yang Zhenrong as directors of the company, from the date of the EGM.

Mr Rodrigues, 67, is an adviser to Str8Bat Solutions India, which provides training tools for young cricket players.

Mr Pilarczyk, 55, is the managing director and regional head of mergers and acquisitions for South-east Asia at Standard Chartered Bank in Singapore.

Mr Yang, 44, is the chief executive of Siix-Orient Technology and managing director of engineering consultant Orient Technology.

If the three resolutions are approved, the trio will be designated as independent non-executive directors of the company, said Mr Lim.

In response to his letter, Fu Yu said the board will convene an EGM in due course and provide further updates to shareholders when there are material developments.

For the first half ended June 30, 2024, Fu Yu recorded a net profit of $72,000, reversing from a loss of $3.9 million in the previous corresponding period. Revenue for the period amounted to $126.7 million, up 78 per cent from the year-ago period.

The improvement in its top and bottom line came amid stronger contributions from both the manufacturing and supply chain management segments.

The company had said then that it expects higher order volumes and inquiries for new projects. It was also positive that business momentum would continue to grow in the second half of 2024.

In its business update for the nine months ended September 2024, Fu Yu’s operating profit stood at $800,000, reversing from a loss of $6.5 million.

Revenue rose 55.2 per cent on the year to $162 million, buoyed by higher sales in the manufacturing and supply chain solutions segments.

Fu Yu shares closed at 12.8 cents on Jan 10.

The Business Times