Party member accuses MCA of CBT in purchase of Star shares

Deputy president Liow and president Chua

The deal had yet to receive the endorsement of the party's central committee, as pursuant to Article 45.9 of the party constitution.“Because of these issues, the acquisition is an abuse of power and is not allowed under the MCA constitution. The share acquisition is void ab initio (treated as invalid from the outset) and is a breach of trust against MCA members.”

An MCA member has urged the police to investigate possible criminal breach of trust by the MCA leadership in the party's acquisition of its own investment arm's 42.4 percent stake in Star Publications (M) Sdn Bhd.

A police report on the matter was lodged yesterday by Bukit Pasar MCA branch vice-chairperson Hui Huat at the Seremban police station.

In his report Hui said that the procedure in which MCA acquired the shares from Huaren Holdings, which is the party's investment arm, was against the party's constitution.

He argued that the purchase was decided solely by the MCA presidential council, without having brought the matter up for discussion at an extraordinary general meeting (EGM) for input by party members.

Hui pointed out that the deal had yet to receive the endorsement of the party's central committee, as pursuant to Article 45.9 of the party constitution.

“Because of these issues, the acquisition is an abuse of power and is not allowed under the MCA constitution. The share acquisition is void ab initio (treated as invalid from the outset) and is a breach of trust against MCA members,” said Hui in the report.

He adds that the party's decision to acquire assets from Huaren Holdings, that is wholly owned by the party, was unnecessary and therefore suspect.

EGM usually held for major acquisitions

Hui added that in failing to hold an EGM to deliberate on the move, the party's leaders had also breached their fiduciary duty.

When contacted for further comments, Hui said that the party had faced a precedence where major acquisitions were subject to the scrutiny of the party general assembly.

“During (former president) Ling Liong Sik's time, an EGM was held before the party acquired Nanyang publishing group. But not this time,” he said.

When asked, Hui said he was considering lodging a similar complaint with the Registrar of Societies as it involved the party constitution.

On Nov 5, MCA confirmed that it was transferring 313,315,769 RM1 shares in Star Publishing from Huaren Holdings to the party, at a value of about RM1.3 billion at prevailing market price.

The party said that the transfer was made to re-organise MCA's investment whereby Huaren Holdings will divest its passive investment in Star to focus on investments in unquoted shares and other assets.

-Malaysiakini