New investor shakes up Ipco board, but shareholders still fret over direction of firm

A shake-up has been set in motion at Ipco International, with long-time executive director Carlson Smith ousted during an extraordinary general meeting (EGM) on Jan 19 requisitioned by Ipco's new investor James Blythman.

Mr Blythman, an Australian who has worked in China, became a 14.24 per cent shareholder in September 2017 after putting S$1.58 million into Ipco through a placement at S$0.0018 per share.

He also succeeded in appointing two new independent directors to the Ipco board on Jan 19, replacing two other independent directors who left last year.

Mr Blythman himself spoke little during the EGM. When shareholders asked him to share more about his company Meridian Equities, he replied: "This is not the appropriate forum to discuss this."

Instead, the man who brought thunder to the EGM was a previously unknown Malaysian shareholder, Tow Kong Liang.

Half-an-hour into the EGM, after Mr Smith said he believed he was being removed because he had resisted the appointment of certain unnamed directors whom he had not been allowed to interview, Mr Tow rose to his feet.

Wielding some sheets of paper, he began to levy certain accusations on Mr Smith based on information that he claimed he had just discovered in a brown envelope lying on the floor behind a row of chairs.

"When I came in, there was a stack of envelopes there, so I just picked up one," he began.

"There were some e-mails, these were written from James Blythman to the (interim) CEO of the company."

About 50 people attended the EGM at Republic of Singapore Yacht Club. It is not clear who had placed the envelopes in the room.

In one e-mail, Mr Blythman wrote that he had been informed that Mr Smith had not visited Ipco's subsidiaries in China and the US for the past four years at least.

"Does he have a problem by which he cannot travel to discharge his duties accordingly?" Mr Blythman asked in another e-mail. He also questioned Mr Smith's continued absence from Ipco's office.

Mr Smith, who had sat on Ipco's board since 2002 and was also its chief financial officer, explained that his passport has been impounded by the Commercial Affairs Department relating to investigations after the 2013 penny stock crash.

"I was initially suspected, in my belief, as CFO because I signed authorisations to open two or three trading accounts under Ipco and some of its subsidiaries," he said.

"I want to emphasise that I never participated in any share-trading activity. I spent more than a hundred days a year in China, and until the penny stock crash, I never knew Ipco was engaged in acts of trading."

Mr Smith added that the Singapore Exchange had given Ipco permission not to reveal his passport situation to shareholders. "I've not been called in for questioning concerning this in the last three years, nor have I been notified that I'm a prosecution witness. I don't know why it's taking so long to get my passport back."

Ipco's interim CEO Goh Hin Calm, together with former CEO Quah Su-Ling, face trial for charges related to the 2013 penny stock crash.

Mr Smith also clarified that he lives alone in an apartment which functions as a home office.

"Many years ago, Quah Su-Ling verbally agreed to this arrangement," he said.

"It doesn't make sense for me to go there (to the main office) very often. Everyone in that office reports to Goh Hin Calm, not to me. The company organisational chart shows that. I have no computer set up there."

In yet another e-mail to Ipco officers last December, Mr Blythman alleged that Ipco had misled investors about the value of a US real estate project held by Ipco subsidiary Capri Investments.

In that e-mail, he alleged that the 979 lot entitlements in the Falling Water Development in Washington State that Ipco had disclosed was misleading, since Ipco had sought in May to reduce the entitlement density of the site down to 592 lots, in order to receive regulatory approval for 261 lots.

Mr Blythman's e-mail questioned whether the project's reported valuation of S$10.5 million was accurate.

Mr Goh stood quietly at the back of the room as the EGM proceeded. By the time one shareholder suggested that Mr Goh share his opinion of the Blythman e-mails, Mr Goh had left the room together with Mr Tow. Mr Tow soon returned but Mr Goh did not.

As Mr Tow continued to grill him, Mr Smith sought to fight back by highlighting the connection between Mr Tow and Mr Blythman.

Mr Blythman had paid for his placement shares using a S$1.58 million cheque from Mr Tow's personal bank account, Mr Smith revealed.

Mr Tow did not deny this, explaining: "I wanted to exchange some Australian dollars. But I have no business with them (Merdian Equities). I needed A$500,000 (S$528,000). Changing money, is that a business relation?"

Mr Tow said he had known Mr Blythman since he was a child, and that his son Marcus was friends with Mr Blythman.

Mr Tow is executive director of Australia-listed International Equities which owns the Seasons Apartment Hotel Group.

His other son, Dennis, is the largest shareholder in Malaysia-listed Kuantan Flour Mills (KFM) and was a non-executive director in the company until he resigned in 2016.

Former Blumont Group executive chairman Neo Kim Hock is a KFM shareholder, and KFM has previously been linked to John Soh Chee Wen, the alleged mastermind of the 2013 penny stock crash.

Eventually, after an hour into the Ipco EGM, shareholders started walking out of the room before Mr Smith had finished stating his defence.

With Mr Smith now deposed, executive power over Ipco is left solely in the hands of interim CEO Goh Hin Calm.

But not all shareholders were entirely happy with the outcome.

Some asked aloud if the director rotation was all "wayang wayang", a Malay term for shadow play. Others raised questions concerning Ipco's future direction.

Independent director Janis Chai, who chaired the meeting, replied: "This is not the appropriate forum to discuss this."

Ipco shares rose 0.1 Singapore cent or 33.33 per cent to close at S$0.004 on Friday.

Marissa Lee

20 January 2018