Lam Soon meeting opposed

A GROUP of Malaysian and Singaporean investors has appealed to the Stock Exchange of Thailand over the refusal by the management of Lam Soon (Thailand) Plc to allow its share proxies to register for a critical shareholders' meeting on Monday.

The appeal was submitted to the exchange on the same day of the meeting, shortly after proxies of the investors, led by Hap Seng Consolidated Berhad, were refused the chance to block a resolution calling for a capital increase.

The conflict over control of Lam Soon, a food, beverage and packaging group, flared up after Whang Tar Liang, its chairman, resorted to a "poison-pill" to deal with rival shareholders.

After refusing to allow the Malaysian and Singaporean investors to let their share proxies register to vote, Whang, a Singaporean, proceeded with the vote on a capital increase from Bt410 million to Bt820 million. The capital increase would make it costly for the rival group to subscribe to the stocks and also dilute its holding if it failed to participate in it.

Earlier, Whang had filed a claim with the exchange charging that the Malaysian and Singaporean investors had tried to take over Lam Soon by surreptitiously raising their stake, according to a source close to Whang. Also, Whang claimed that the rival group failed to report to the exchange authorities each time it acquired shares equivalent to more than 5 per cent of the company's capital.

"The group, Hap Seng Consolidated, is in the palm oil business and it is interested in acquiring the company to create a network," said the source close to Whang.

However, the Malaysian and Singaporean investors claimed that with a holding of about 30 per cent, they could not acquire Lam Soon. They were simply dissatisfied with the way Whang was running the company.

Last year, management, led by Whang, announced a dividend payout of Bt8 a share (Bt7.20 a share after taxes). Then, it quickly called for a doubling of the company's capital to Bt820 million. Shareholders would be required to pay Bt10 a share - or an additional Bt2.80 on top of the dividend receipt - just to maintain their current holding ratio.

Dissatisfied with the capital increase, the Hap Seng group tried to block it. However, the share proxies of it and its allies - ABN Amro Asia Services (Singapore) Pte Ltd, UBS AG Singapore, and Whang Sun Tze - were not allowed to register to vote.

If the proxies, who held a combined 30 per cent stake, had been allowed to vote, they could have blocked the capital increase because the resolution required the support of at least 75 per cent of all shareholders.

In the capital increase resolution, Whang mustered the support, in secret balloting, of shareholders with a total of more than 17 million shares. Those voting against the resolution held, in total, just two million shares. Immediately after the vote, he had the outcome registered at the Commerce Ministry.

Hap Seng tried to block the move at the Commerce Ministry by requesting an injunction against the registration of the meeting's outcome. It argued that the registration should not be allowed to proceed because the shareholders' meeting was not properly conducted as not all shareholders were permitted to register.

BY THANONG KHANTHONG