SGX RegCo investigating Magnus Energy disposal

It's looking into possible breaches of the Catalist rules after Magnus' sale of interest in firm

THE Singapore Exchange's regulatory arm (SGX RegCo) on Friday notified Catalist-listed Magnus Energy Group to put on hold all corporate transactions until its board is fully reconstituted, and said it would investigate a disposal by the firm for possible breaches of the Catalist rules.

Magnus Energy is set to convene an extraordinary general meeting (EGM) on Jan 9 as two teams seek shareholders' support for boardroom control of the troubled oil and gas firm. In a Dec 31 update, the firm said that "all planned actions are expected to be taken only after the EGM".

But it was brought to the attention of SGX RegCo that the company had sold its 50 per cent indirect interest in Mid-continent Environmental Protection to the latter's existing director, Chong Yen Yee, for RM1 (33 Singapore cents).

As the disposal involved negative relative figures under Catalist rule 1006, the firm should have consulted SGX RegCo on the applicability of Chapter 10 of the Catalist rules. It did not do so.

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"The company had proceeded to complete the disposal despite being informed by the sponsor of the need to consult the exchange for the disposal," said SGX RegCo.

According to the company, the disposal was part of its winding down of its oil and gas equipment supplies and services segment, allowing it to exit from its loss-making associate and facilitate the striking-off process for it in Malaysia.

SGX RegCo noted that the board at the time comprised Seet Chor Hoon and Lee Chong Ping, with Mr Lee proposed to be re-elected as a director at the upcoming EGM.

Separately, Magnus Energy on Friday said it had reached a mutual agreement with chief executive officer Luke Ho for the latter to relinquish his role with effect from Jan 9, in line with the group's succession plan as set out in a Dec 18 circular issued by the company and requisitioning shareholders.

He will also, as soon as practicable, resign from all directorship posts in the group's subsidiaries.

Magnus Energy has entered a written agreement with Mr Ho for him to remain available if he is needed in responding to queries from the Singapore Exchange and sponsor, and to hand over his duties to the new CEO when appointed, including the handover of contact details of all business dealings of the group.

A handover list has been prepared by Mr Ho and certain items in it "have already been briefed to the company's financial manager", said the firm.

Janice Heng

Business Times