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Monday, November 17, 2014

Market guru Teng Boo reveals the dirt at ICAP: 'Minority shareholders are oppressing the majority'

Market guru Teng Boo reveals the dirt at ICAP: 'Minority shareholders are oppressing the majority'
Kuala Lumpur – In a media conference held today in a leading hotel, Tan Teng Boo, as a share owner of icapital.biz Berhad (ICAP,5108), invited the City of London, a London-based fund management company, to send its representative to attend the Adjourned AGM of icapital.biz Berhad to be held on Sunday, 30th November 2014.
Teng Boo, who is also the Designated Person of Malaysia’s only listed closed-end fund, conducted an unusual media conference today in his capacity as a share owner of ICAP. Asked why he is making this request, Teng Boo explained that he wants the 11.39% of share owners to explain their reason/s for opposing the re-appointment of Tunku Abdul Aziz as a director of ICAP.
ICAP held its 10th AGM on 11th Oct 2014 but when it came to Resolution number 4 on the reappointment of Tunku Abdul Aziz, Teng Boo requested the AGM to be adjourned, which was approved by share owners. However, this whole matter was inaccurately and irresponsibly reported in a local Chinese daily, which claimed that the adjournment was not necessary. Teng Boo said that the adjournment was important for share owners to educate themselves on the real issues underlying Resolution 4.
In explaining his reasons for seeking an adjournment, Teng Boo said, “Usually, the majority or controlling shareholder oppresses the minority shareholders. In the case of icapital.biz Berhad, two minority share owners owning only 11.39% are actually oppressing the majority of share owners.”
The 11.39% deposited their proxies opposing Resolution 4 only 2 days before the 10th AGM.  While this is procedurally permitted, Teng Boo explained that the problem is beyond this, as it concerns ethics, moral principles and good corporate governance, especially of large powerful investors.
A listed closed-end fund is not allowed by the Malaysian regulations to have a controlling or majority shareowner. For ICAP, it actually has more than 3,300 share owners, with a huge majority being individual Malaysians, spread physically across the whole country and with a majority owning less than 10,000 or 100,000 shares each. Teng Boo highlighted that given such a shareholding structure, any party having 11.39% is in reality in a very powerful, dominating position. For all practical purposes, the 3,000 plus share owners of ICAP never had a fair chance to know what the issue was all about and thus did not take part in the voting on Resolution 4.
For a listed closed-end fund, the Board of Directors plays a crucial role. The share owners of ICAP need to know why a director is being nominated or why the appointment of a director is being opposed to. Mr Tan explained that is only good corporate governance. In the 10th AGM, Teng Boo asked if there was any representative present from the 11.39% share owners and if there was, for the representative to explain to the share owners why they are opposing Resolution 4. No explanation was provided as there was apparently no representative from City of London in the AGM. Teng Boo explained in the media conference that he requested for an adjournment of the 10th AGM so that the “true” majority share owners of ICAP would have a fair opportunity to know what is happening to their Fund and its Board and hence make an informed decision on a crucial issue.
Shocking disclosure
Teng Boo then shared a shocking disclosure that after the AGM, a Mr Neo Sai Kiat came to greet him. Mr Neo works as analyst for City of London in their Singapore office.  Apparently, Mr Neo Sai Kiat, as a representative of City of London, attended the 10th AGM without any registration or proper authorization and did not reveal himself during the 10th AGM.
It was also reported by a local Chinese daily that during the 10th AGM, Teng Boo was “emotional” and was abusing his position. The experienced fund manager from Capital Dynamics explained in the media conference that it is not his desire to muscle his opinion on others. He disclosed that he will therefore not be attending the Adjourned AGM to allow the other share owners to have their say in a fair and democratic voting process.
Teng Boo said that share owners of ICAP need to think very carefully as a lot is at stake. The real issue is not about Resolution 4. The real issue is about the hidden agenda of the 11.39% share owners, whether their motives are aligned with the long-term interest of ICAP and its 3,000 plus loyal share owners. The real issue is whether 11.39% should control the ICAP via unethical practices. Teng Boo said if they can block the reappointment of one director with only 11.39% share ownership, what is there to prevent them from abusing their power again? -Media statement

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