MC Payment’s share price rose some 17 cents on June 18, 2021 to 50 cents, in reaction to an announcement that the company had received a letter of intent from OY!, to take a strategic stake in MC Payment. OY! is an Indonesian remittance and payment company, and its investors include Softbank and Temasek Holdings.
At its current price, MC Payment is approaching its theoretical consolidated price of $0.525 at the point when the reverse takeover (RTO) completed on Feb 18 this year. On Feb 19, founder and CEO Anthony Koh had 6.11% in MC Payment, and Ching Chiat Kwong owned 28.09%. Ching is better known as the executive chairman and major shareholder of Oxley Holdings.
On Mar 10, 2021 MC Payment announced it had raised $4 million through a placement at 40 cents per share. The placement shares accounted for 3.7% of the enlarged share capital. Investors included Toh Soon Huat, Lim Tiong Kheng, other high net-worth clients of OCBC Securities and Levin Lee of Ace Peak Capital.
The placement diluted Koh’s holdings to 5.88%, and Ching’s to 27.06%. A long-term shareholder, Goh Way Siong, who held 5.18% of MC Payment post-RTO, disposed of some shares, and is no longer a major shareholder. As at Feb 24, his stake is down to 4.59%.
The shareholdings are important, because they could determine the outcome of votes at an EGM to be held on June 30. The EGM was requisitioned by Ching, to appoint as directors Harry Ng, Shawn Ching, Johnny Chee, Henry Tan and Ching himself to the board. Ching’s intent is not to broaden the board of a small Catalist company. He has also proposed that the current slate of directors with one exception be voted out.
On SGX, and through media, a polite, scripted exchange of words has developed between MC Payment’s board as represented by founder and CEO Anthony Koh, and Ching.
See also: Four Questions for MC Payment's CEO
According to financial advisers who were familiar with the introduction, the original shareholders of MC Payment when it was a private company were looking for a listing venue. In 2017, MC Payment and Artivision signed a heads of agreement with Artivision issuing shares to acquire MC Payment. In 2019, based on an Artivision circular, MC Payment would have a base valuation of $80 million, and a maximum valuation of $93.3 million, with a formula to calculate the total consideration.
As it happened, a Settlement Agreement was part of the sales and purchase agreement where Artivision had to redeem around $10 million of bonds for which Ching was liable. At the point of RTO, the Settlement Agreement to Ching would be extinguished, and Ching would be entitled to settlement shares worth $10 million, the settlement sum, in MC Payment. These were issued at $0.0031 per share (0.31 cent) and gave Ching some 3.22 billion shares. Post-RTO, 50 shares were consolidated into 1 share. This translates to a post-consolidation issue price per share of $0.155 cents (15.5 cents) for 64.5 million post consolidation shares alloted to Ching.
Under the RTO, the bulk of the shares to be issued were at an issue price of $0.525 per share, compared to the March placement price of 45 cents.
On April 28, at an AGM, Shawn Ching, who was not up for re-election as he had been appointed in Feb this year, Harry Ng, and Kesavan Nair were put up for re-election. Shawn Ching and Ng did not garner sufficient votes to stay on the board. According to a statement by Ching dated June 18, “Mr Anthony Koh later informed Mr Harry Ng that he was not confident that the shareholders would re-elect him to the Board, and Mr Shawn Ching therefore stood for re-election instead of Mr Anthony Koh”.
According to the minutes of the AGM posted on SGX on May 24, 56.69% had voted against the re-election of both Shawn Ching and Harry Ng.
“Mr Harry Ng and Mr Shawn Ching were subsequently not re-elected at the AGM, and from the number of shares (108,957,584 shares) against Mr Harry Ng and Mr Shawn Ching’s re-election, all the shareholders attending and voting (other than me, Mr Harry Ng and Mr Tee Wee Sien) had seemingly voted against their re-election, including Mr Anthony Koh. This was seriously concerning to me, since the Company’s Notice to Shareholders on April 6, 2021 expressly states that “[s]hareholders (whether individual or corporate) appointing the Chairman of the AGM as proxy must give specific instructions as to his manner of voting, or abstentions from voting, in the proxy form, failing which the appointment will be treated as invalid,” Ching says in his statement.
While MC Payment did not directly address the standing in of Shawn Ching for Koh and the matter of the proxy votes, the company said it would do so on or before June 23, 2021. "The Board notes that, despite repeated requests from the Company, Mr Ching has to-date not provided any details or evidence of these allegations or the alleged wrongdoer. Be that as it may, the independent directors of the Company, for good measure, have taken steps to look into this and will update the Company’s shareholders in due course. The Company will address Mr Ching’s allegations in greater detail in the Company’s second circular to its shareholders, which will be published on SGXNet and on the Company’s corporate website at on or before June 23, 2021," the company said.
Why the tussle to control MC Payment? The company has four payment licences in Singapore, Malaysia, Thailand and Indonesia. Market observers are saying that authorities in these countries are no longer disbursing payment licences. MC Payment’s ambition is to become a regional player in the payment space. How that ambition pans out could depend on the arithmetic of votes on June 30.
