Are Natural Cool shareholders acting in concert?
In the short space of just two months, two groups of
shareholders have separately tried to oust Natural Cool executive chairman
Joseph Ang. He, in return, has sought to draw links between them, connecting
them and their actions all to the company's proposed divestment of a 16 per
cent stake in an oil and gas exploration firm, HMK Energy.
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Melissa Tan, Business Times
13 January 2017
In the short space of just two months, two groups of shareholders have separately tried to oust Natural Cool executive chairman Joseph Ang. He, in return, has sought to draw links between them, connecting them and their actions all to the company's proposed divestment of a 16 per cent stake in an oil and gas exploration firm, HMK Energy.
That raises the question of whether the two nominally disparate groups might possibly be considered concert parties. It may seem an academic one - there has been no public sign thus far from regulators that the two groups of shareholders are acting in concert.
But the definition of concert parties might be broad enough to include cases such as this, and if the shareholders are in fact acting in concert, their combined stakes are certainly high enough to require them to make a mandatory general offer for Natural Cool.
The Singapore code on takeovers and mergers, as shown on the Attorney-General's Chambers' online statutes page, defines concert parties thus: "Persons acting in concert comprise individuals or companies who, pursuant to an agreement or understanding (whether formal or informal), co-operate, through the acquisition by any of them of shares in a company, to obtain or consolidate control of that company."
Mr Ang's suggestion is that the shareholders who requisitioned the EGMs know each other and are working towards the same goal: preventing Natural Cool from divesting HMK Energy. Some of them have also recently snapped up more shares in the Catalist-listed firm, amassing enough to theoretically control it.
The first attempt shareholders made to remove Mr Ang was around a month ago, at an extraordinary general meeting (EGM) on Dec 12, and the proposal narrowly failed to pass. That EGM was requisitioned by substantial shareholder Lim Teck Chuan, who runs Catalist-listed electrical products retailer Choo Chiang Holdings.
In parallel, Mr Lim and the company's chief executive officer Tsng Joo Peng together filed a writ of summons against Mr Ang and Natural Cool late last year, to invalidate a substantial share placement to an investor, Ng Quek Peng, whom Mr Ang brought in.
Shareholders' second and most recent attempt to remove Mr Ang was announced earlier this week. This EGM was called by Ong Mun Wah and Edi Ng and has yet to be scheduled. The two requisitioners want to boot out all the directors on the board except for Mr Tsng and appoint four new ones.
The connections between Mr Ong, Ms Ng, Mr Lim and Mr Tsng are somewhat nebulous and certainly tangled, but one possible common central figure does crop up: a man named Omar Loebis, who controls HMK Energy.
Mr Ang said in a Nov 25 circular that Mr Loebis and Mr Ong were both substantial shareholders and directors of HMK Energy as at Nov 21, 2016.
For Mr Lim, Mr Loebis's investment holding company Rhodus Capital owned 14 per cent of Choo Chiang as at March 23 last year based on Choo Chiang's FY2015 annual report, Mr Ang noted in the circular. Mr Ang added that Mr Lim had proxied his Natural Cool shares to Mr Loebis during the company's annual general meeting in April last year and again at an EGM in June last year.
As for Ms Ng, she shares the same registered address as someone called Wong Leon Keat, according to a Straits Times report. Mr Wong and Mr Loebis jointly owned Rhodus Capital as at January 2013, Mr Ang said in the circular. Coincidentally, Mr Wong is one of the people that Mr Ong and Ms Ng want to appoint to the board.
Adding up all the shares that Mr Ong, Ms Ng, Mr Lim and Mr Tsng hold, the total would exceed 30 per cent, the threshold for a mandatory general offer.
Mr Lim became the single largest shareholder last month after he and Mr Ong both snapped up shares on the open market. He owned 11.35 per cent and Mr Ong 10.99 per cent as at Thursday, and Mr Tsng had 6.93 per cent. That already sums to 29.27 per cent. Ms Ng held 11.2 million shares or about 4.5 per cent, according to the EGM notice she and Mr Ong wrote on Jan 9, which easily tips the balance over.
Cases where parties have been determined to be acting in concert and forced to make an offer have occurred before, though not in recent memory. In 2001, the Securities Industry Council ordered the ousted chief executive officer of Serial System to make a general offer after he asked a friend to help him buy more shares in Serial System and the purchase took their combined stake over the takeover threshold. It is unclear whether something similar will happen for Natural Cool, but at this juncture it ought not to be ruled out.