Thai vs Thai: Supermax’s boardroom saga raises huge red flag

 

Family spats are a fact of life, but when the dirty laundry is aired in public, it becomes embarrassing for those involved.

However, when the dispute involves the executive chairman of a multi-billion ringgit listed company and his daughter, who then quits as a director from the board, it becomes a matter of concern for company shareholders, investors and the public.

That’s exactly what transpired when glove maker Supermax Corp Bhd announced last week that Cecile Jaclyn Thai had resigned as non-executive director after a series of disagreements with the board.

She is the daughter of executive chairman Stanley Thai and his wife, Cheryl Tan, who founded the company in 1987 and together control a 38.37% stake in the group.

“Ms Cecile Jaclyn Thai expressed (a) dissenting voice on several matters discussed at the board meetings. However, the decision was carried by majority vote,” the company said in a filing with Bursa Malaysia on April 18.

The Supermax filing did not detail what the disagreements were about or the reasons for Cecile’s dissenting stance.

Fortunately, the investing public did not have to wait long to find out details of the Supermax boardroom saga as Cecile spilled the beans in her resignation letter, which was conveniently sighted by The Edge the very next day (April 19).

In her bombshell resignation letter, Cecile, 35, said she resigned as non-independent, non-executive director over the Supermax board’s alleged failure to uphold corporate governance practices and their fiduciary responsibilities.

She also claimed there had been concerted attempts by the glove maker’s board to “act against corporate governance practices, punish dissent and silence transparency”.

Probably the most damning statement from her resignation letter dated April 16 was that she experienced “bullying and silencing” from other board members, including her father, Stanley, while trying to uphold her fiduciary duties.

A spokesman for Cecile confirmed that the letter was authentic, according to the news report.

Cecile, who holds 211,258 Supermax shares, was first appointed as executive director on Jan 2, 2018 and later re-designated as a non-executive director on Feb 28, 2022.

According to her letter, Cecile recounted how these disagreements started in November 2021 when her father stated his intention to remove her from the board following her opposition to his proposed purchase of a new aircraft for US$47.39 million (RM210.52 million).

The aircraft was to be purchased by a Supermax subsidiary to replace the one acquired just a year earlier. Cecile said she rejected the proposal as the proposed acquisition was “not in the company’s best interest”.

In February last year, she expressed her view that the conferment of sole authority on Stanley as the single authorised person for the company’s bank accounts was against the company’s financial accountability and corporate governance practices.

The allegations in Cecile’s resignation letter, if true, are so serious that it raises a huge red flag.

A spokesman for the group, when contacted by The Edge, dismissed Cecile’s allegations that she was subject to bullying and silencing from other board members.

The unnamed spokesman claimed there have been no efforts or attempts to stifle any director, and that Cecile’s allegations and assertions were unfounded.

However, it is concerning that Supermax has so far not responded officially to Cecile’s allegations through Bursa’s official dissemination channel in the form of an exchange filing.

The only communication since the announcement of Cecile’s resignation has been two Bursa filings on April 19 and 20 of shares buyback of a total of 28 million shares worth RM24.91 million.

In the two trading days following the resignation announcement, its share price fell a total of 11.5 sen or 11.86% to 85.5 sen, valuing the group at RM2.33 billion. This means that Supermax’s market capitalisation had fallen by about RM309 million in just two days.

The shares buyback is likely to have lessened the fall in the share price.

Supermax owes it to its stakeholders, minority shareholders, investors and the public to explain its side of the story.

It cannot maintain an elegant silence given that Cecile’s complaints are not of a personal nature but concern issues of corporate governance, fiduciary responsibility, bullying, and silencing of dissent.

If there is any truth in the allegations, or wrongdoing by any party, the capital market regulators must come down hard on the offenders. - FMT

The views expressed are those of the writer and do not necessarily reflect those of MMKTT.