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Boardroom tussle looming at HG Metal
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katak88
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05-Dec-2009 01:24
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(SINGAPORE) The reason for the bid by a non-executive director of HG Metal Manufacturing to oust three executive directors, including the CEO and the chairman, has come into the open: five straight quarters of losses at the steel products company. 'We are deeply concerned with the poor financial performance of the group, which is evident from the consecutive losses made in the last five quarters,' said substantial shareholders Lingco Marine and Lingco Holdings in a circular yesterday. The two Lingco units, which are involved in shipbuilding and ship chartering, are linked to non-executive director Sia Ling Sing, who has been on the board of HG Metal since 2003. Mr Sia - who is the managing director of the Lingco group of companies - holds a 3.75 per cent direct stake in HG Metal. He also has further control through a 10.66 per cent stake held by Lingco Marine. The two Lingco units have called for an extraordinary general meeting on Jan 5 next year to remove CEO Wee Piew, chairman and founding member Tan Chan Too and executive director Lee Leng Loke. The meeting will be held at Hotel Re!. They have also proposed to replace them with former members of parliament Chng Hee Kok and Tan Eng Liang, as well as hedge fund manager Roy Ling Chung Yee. For the fiscal year ended September 2009, the steel stockist posted a net loss of $67.5 million, against a net profit of $22.6 million a year ago. Based on post-tax losses cited in the circular, the company's five consecutive quarterly losses started in the fourth quarter of FY2008 when it registered a post-tax loss of $33.4 million. The Lingo units acknowledged the impact of the global economic crisis but expressed concern that the company continued to suffer heavy losses even after the substantial inventory write-down of $47 million in the fourth quarter of FY2008. The company also made inventory write-downs of $9 million and $14.3 million for Q3 and Q4 respectively of FY2009. This was despite including profits from recently acquired BRC Asia - of which Mr Sia is also a board member - from the first quarter of fiscal 2009. The same circular showed that BRC Asia had made a total post-tax profit of $16.5 million for the fiscal 2009. They also compared its results with competitors' such as those of Hupsteel, Lee Metal and Union Steel, which did not post the same stretch of losses. Mr Wee said that he was disappointed with the ouster bid, saying that Mr Sia had never threatened to remove him and the other executive directors from the board. Mr Wee acknowledged that the losses have been a concern for the board but said that the situation did not warrant a removal of directors. He argued the need to take into account the profitable periods since the company's 2002 listing. 'It's like a football match. You can't lose one game and sack the manager,' said Mr Wee. He also defended the write-downs that dragged the company into the red, saying that it has to make conservative provisions with the huge swings in steel prices. He noted that the largest write-down of $47 million that triggered the reversal into losses in the fiscal 2008's fourth quarter was due to sharp falls in steel prices and follows a record nine months of profits for the company. Mr Wee also noted that he and the other two directors have been veterans in the business. Shares of HG Metal closed unchanged yesterday at 13.5 cents. |
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katak88
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03-Dec-2009 22:17
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Notice Of EGM And CircularDec 03, 2009
Notice Of EGM And Circular
Attachments
http://hgmetal.listedcompany.com/news.html/id/190433 |
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katak88
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03-Dec-2009 22:12
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A BOARDROOM tussle is shaping up at HG Metal Manufacturing, after a non-executive director pushed for three key board members to be removed from the company.
Substantial shareholders Lingco Marine and Lingco Holdings have called for an extraordinary general meeting to boot out chief executive officer Wee Piew, chairman and founding member Tan Chan Too and executive director Lee Leng Loke from the board. The two Lingco units - which are involved in shipbuilding and ship chartering - are linked to non-executive director Sia Ling Sing, who has been on the board of HG Metal since 2003. Mr Sia - who is the managing director of the Lingco group of companies - has a 3.75 per cent direct stake in HG Metal, Bloomberg data showed. He also has further control through the 10.7 per cent of HG Metal held by Lingco Marine. No reason was given for the removal push and a director from Lingco Marine - Seah Hoe Seng - told BT that Lingco is expected to elaborate on the reasons in a circular today but declined further comment.
Mr Wee said that the announcement was a surprise to him, adding that he did not know why they have called to remove him and the other directors from the board. 'I am equally puzzled,' he told BT yesterday. 'We had a board meeting last week and it was a cordial one,' added Mr Wee, who has a direct 0.05 per cent stake in HG Metal, Bloomberg data showed. The two Lingco units have also suggested to appoint Chng Hee Kok and Roy Ling Chung Yee to replace the directors if they are removed. HG Metal is a steel stockist and recently took over another listed firm BRC Asia - which makes and sells wire mesh and fabricated steel products for the construction industry - after years of pursuing organic growth. It currently holds 85.6 per cent of BRC Asia, which also has Mr Sia on its board of directors. The company posted a fourth quarter net loss of $11.5 million, narrowing from a net loss of $33.3 million for the same period a year ago. Shares of HG Metal gained half a cent to finish at 13 cents yesterday.
'We are deeply concerned with the poor financial performance of the group, which is evident from the consecutive losses made in the last five quarters,' said substantial shareholders Lingco Marine and Lingco Holdings in a circular to shareholders on Thursday. The two Lingco units - which are involved in shipbuilding and ship chartering - are linked to non-executive director Sia Ling Sing, who has been on the board of HG Metal since 2003. Mr Sia - who is the managing director of the Lingco group of companies - holds about 4 per cent direct stake in HG Metal. He also has further control through about 10 per cent of HG Metal held by Lingco Marine. The two Lingco units have called for an EGM on January 5, 2010 to remove CEO Wee Piew, chairman and one of the company's founder Tan Chan Too and executive director Lee Leng Loke. They have also proposed to appoint former Members of Parliament Chng Hee Kok and Tan Eng Liang, as well as hedge fund manager Roy Ling Chung Yee as replacements. Consecutive losses in the last five quarters at HG Metal Manufacturing have pushed a non-executive director to try to boot out the CEO, chairman and another director from the board. |
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