Oei Hong Leong, a substantial shareholder of Raffles Education, is making yet another attempt to oust chairman and CEO Chew Hua Seng (picture) from the company.
On Aug 17, the company received an EGM requisition notice from Oei, with a list of resolutions for shareholders to vote upon.
Raffles Education, in its announcement over SGX, said it is seeking legal advice.
According to Bloomberg data, Chew holds 33.58% of the company and Oei, 12.91%.
Besides seeking to remove Chew as chairman and CEO, Oei wants Raffles Education to appoint an independent special auditor to review the circumstances surrounding the handwritten "confidential agreement" between himself and Chew dated Oct 16 2017.
This handwritten agreement had earlier led to a lawsuit between the two. Oei had sued Chew for allegedly reneging on the agreement. Earlier this year on Feb 25, the court ruled in Chew’s favour, as the document wasn't deemed legally binding.
Under the purported terms of the agreement, Chew will find a buyer for the Raffles Education shares held by Oei at 44 cents each, which was a premium of 45% over the then traded price. Raffles Education shares closed Aug 17 at 10 cents.
As part of his list of resolutions listed in the Aug 17 notice, Oei wants the special auditor to also check if there’s any regulatory compliance, corporate governance and disclosure issues arising from the agreement, including but not limited to whether the Raffles Education had failed to announce materially price-sensitive information at material time.
In addition, Oei wants to the company to disclose the identities of placees who took up 95 million new shares back in Oct 2017.
He also wants a special audit on the circumstances surrounding the placement of 318.2 million rights shares back in April 2018. Specifically, Oei wants to know the source of funds used by Chew to pay for his entitlement of the rights shares.
In another resolution, Oei wants to appoint an independent special auditor to review the circumstances surrounding all loans, including any renminbi loans, extended by Chew to the company and its subsidiaries.
Under Singapore company rules, shareholders controlling more than 10% of a company’s shares can call for an EGM. Oei has exercised this right several times previously.
On Dec 13 2018, Oei sent an EGM requisition notice to the company, to block a proposed rights issue of 275.9 million shares at 10 cents each. The funds raised were to repay a loan given by Chew to Raffles Education.
On Dec 31 2018, the company said that the requisition is not valid as there's an existing shareholders’ mandate giving Raffles Education the right to undertake a rights issue.
Yet another EGM requisition was made by Oei on Oct 12 2017. Similar to his most recent Aug 17 requisition, Oei wanted to remove Chew. He also wanted the company to disclose the identities of placees who took up the 95 million new shares earlier that month.
The handwritten agreement ensued after the Oct 12 2017 EGM requisition, which was subsequently withdrawn by Oei.
