A GROUP of Malaysian and Singaporean investors yesterday cried foul after
they failed to register their share proxies at a shareholders' meeting to block
a capital increase of Lam Soon (Thailand) Plc, a food, drinks and packaging
group.
The registration officials of Lam Soon (Thailand), led by chairman Whang Tar
Liang, denied the rival shareholders' group the right to register their proxies
to attend the shareholders' meeting, which would vote on a capital increase and
on a change to the company's articles of association.
The group of Malaysian and Singaporean investors, led by Hap Seng
Consolidated Berhad, claimed to hold more than 30 per cent in Lam Soon. They
said they could have blocked the capital increase of Lam Soon from Bt410 million
to Bt820 million because passage of this resolution would require at least 75
per cent of the vote.
Without opposition, Whang, also a Singaporean, succeeded in winning approval
for the capital increase and other minor resolutions. He is supported by Thai
investors.
Lam Soon is a small listed company with a market capitalisation of slightly
under Bt1 billion. It is trading at about Bt22 a share.
Cheah Yee Leng, legal manager of Hap Seng Consolidated, which represented the
Singaporean investors, said the group did not approve the way the Whang-led
management had been running the company, which did not take into account the
interests of the minority shareholders.
In November last year, Whang announced Lam Soon's dividend payout of Bt3.90 a
share for an operational period between January and September 1999.
Simultaneously, the company also made another dividend payout of Bt4.10 a share,
using the money from retained earnings.
Altogether the dividend payout of Bt8 a share cost the company a combined
Bt328 million. After deducting 10 per cent in dividend tax, the shareholders
took home a net Bt7.20 a share.
But after announcing the dividend payout policy, Whang went on to announce a
capital increase to Bt820 million through a one-to-one rights issue at Bt10
apiece, saying that the company needs fresh money for liquidity.
Cheah objected to this policy because it requires shareholders to pay Bt2.80
a share to maintain their shareholder ratio and prevent a share dilution.
Whang declined to give a press interview, saying through his secretary that
he was busy.
Before the extraordinary shareholders' meeting, Whang had a letter posted at
the front door of Lam Soon's office, located in the Bang-na Complex. Among other
things, the letter stated: "Any person who has no legal right in attending
this meeting cannot attend the meeting.
"All documents presented or given to the company officers and/or the
chairman shall be considered as the documents for the meeting and for the
company's record and will be kept and maintained at the company without
returning to any person.
"The chairman has the right to consider and make absolute decisions in
any matter at the sole discretion of the chairman."
Suvarn Valaisathien, the legal adviser for this group of Malaysian and
Singaporean investors, was blocked from registering the share proxies of ABN
Amro Asia Services (Singapore), UBS AG Singapore-PB Securities Client, and Lam
Soon Cannery Private, which together hold more than 30 per cent in Lam Soon.
"Although the share proxies were presented, properly documented with
notary signatures, they were not counted by the company's officials," he
said.
Finally, he and his legal team were allowed to get into the shareholder's
meeting using a small-stake proxy.
The result of the shareholders' meeting showed that share proxies
representing 19 million shares, out of the total 41 million shares, were
presented. Of this, 17 million shares voted for the capital increase and 2
million voted against an increase.
More than 12 million shares of the rival Singaporean shareholders were denied
a right to registration, resulting in Whang's initial victory and firmer grip on
Lam Soon.
In the event of a capital increase, if the rival shareholders are further
denied a right to subscribe, they will see a dilution of their shares.
As of Jan 10, the major shareholders of Lam Soon (Thailand) were Lam Soon
Holding Co (32.04 per cent), ABN Amro Asia Services (Singapore) Pte (13.34 per
cent), ABN AMRO Asia Securities Plc (11.1 per cent), UBS AG Singapore-PB
Securities Client (9.12 per cent), Lam Soon Cannery Private Ltd (7.48 per cent)
and Whang Tar Liang (2.62 per cent).
Suvarn said the rival group will try to block the company from registering a
capital increase at the Commerce Ministry.
BY THANONG KHANTHONG