ILB Group Berhad boards announced that it has terminated the proposed acquisition from Impian Nuri Sdn Bhd via 37,780,000 new ordinary share issuance for 9 parcels of commercial land with shop lots after the issueance of an originating summons by minority shareholders is still being seen to possibly conduct itself oppressive manner.
Minority shareholder, BT Investment Capital Limited, who had taken to the courts in August 2022 to prevent unnecessary share dilution by ILB’s Board via the proposed transaction, agrees with ILB’s termination announcement and said it is just.
However, the 20 October 2022 termination announcement came a day after a second Originating Summons was served to ILB, its directors and Impian Nuri on 19 October 2022. The second Originating Summons was filed at the Shah Alam High Court on 17 October 2022.
“Unfortunately to-date, ILB has yet to announce that it had been served a second Originating Summons before the termination announcement. This is in defiance of the Bursa Malaysia Main Market Listing Requirements which oblige listed companies to announce material information immediately. The deliberate non-announcement appears to be an attempt to conceal information to the bourse and public,” said BT Investment Capital.
The concern is that ILB can still proceed with the proposed acquisition as the 20% General Mandate valid until 31 December 2022. Until then, ILB can still resurrect the proposed acquisition or other transactions that can or will dilute minority shareholders’ stake and infringe their interest using the 20% General Mandate.
BT Investment Capital is contemplating proceeding with the court action as the actions and conduct of the directors of ILB in the past months have not demonstrated that they uphold their duty of care and act in the best interest of shareholders. They attempted to execute a proposed acquisition that dilutes existing shareholders’ stake, using the 20% General Mandate which was meant for improving cash flow, boosting liquidity and working capital and misled minority shareholders by not announcing material information immediately.
The second Originating Summons complains, among others, that ILB’s Board is oppressive in blocking an Extraordinary General Meeting (“EGM”) requisitioned to revoke the 20% General Mandate approval given by shareholders at ILB’s Annual General Meeting on 26 April 2022.
The first Originating Summons was struck out on technical grounds of locus standi. BT Investment Capital addressed the locus standi technicality by transferring its shareholding of ILB to its own account instead of a nominee account in UOB Kay Hian Nominees (Asing) Sdn Bhd on 14 October 2022.
“Any attempt to dilute the shares of minority shareholders is tantamount to oppressive conduct. To protect the interest of minority shareholders like us, we have to consider continuing legal recourse to compel ILB to convene an EGM to present their proposed utilisation for the 20% General Mandate and potentially for shareholders to rescind the mandate given to ILB’s Board of Directors,” said BT Investment Capital.
