Southsea Refutes Allegations Made By Bahvest At EGM

Southsea Gold Sdn Bhd (“Southsea”) has been made aware of and refutes the untruths made by Bahvest Resources Berhad (“Bahvest”)’s new management to the shareholders at the extraordinary general meeting (“EGM”) held on 13 June 2023.

The Board of Directors of Southsea said, “The Convenors wanted to remove Datuk Lo from Bahvest and he has resigned from the company he founded, accordingly. Yet, they are still not happy and still want to damage our director, Datuk Lo’s reputation and slander him in the eyes of Bahvest’s shareholders to justify their actions. This should only be a pure commercial fight for control of Bahvest and the issue of wrongful occupation over Southsea Gold’s mining lease land.”

Southsea would like to set the record straight and provide the accompanying proofs on the following misleading comments:

1/ RM13 million were transferred from Bahvest when Datuk Lo Fui Ming was about to exit the company.

Truth: There was no RM13 million transfer that took place as stated. RM13 million is the negotiated compensation, reduced from the RM20.4 million of the original letter of demand. This RM13 million is termed as a non-refundable deposit for the purpose of continuing negotiations towards reaching a final compensation sum to be paid to Southsea as part of a temporary settlement arrived between Southsea and Bahvest in relation to the wrongful occupation. It was to be paid in two tranches in consideration of an extension of time of 90 days granted to Bahvest.

RM6 million was paid to Southsea on 10 May 2023 and payment for RM7 million was to be made by 29 May 2023. Below is an excerpt of a letter dated 19 May 2023 that Southsea received from Bahvest’s lawyers seeking an extension of the remaining deposit payment, pending outcome of Bahvest’s EGM.

“…the independent directors of Bahvest who act as caretaker Board of Directors, would like to seek an extension over the payment of the second tranche of deposit and place on hold all negotiations between Bahvest/Wullersdorf and Southsea Gold relating to the issue of the alleged wrongful occupation and/or trespass of Southsea Gold’s land until after the result of Bahvest’s EGM which would be held on the upcoming 13 June 2023.”

Background: Bahvest’s crusher plant, processing factory, workers accommodation and other structures (collectively, “fixtures”) had been occupying Southsea’s leased land since 2018. No compensation was enforced by Southsea on Bahvest due to the goodwill between the companies and in consideration that Bahvest operations were just starting then.

The demand for compensation was precipitated by the hostile takeover initiated by the current management, which diminished all form of goodwill between Southsea and Bahvest.

A temporary settlement had been worked out following good faith negotiations between Southsea and Bahvest with full authority from Bahvest’s Board of Directors (“Board”) at an emergency Board meeting held on 3 May 2023.

The temporary settlement was subsequently ratified by the Board during a Board meeting on 15 May 2023. Neither Datuk Lo Fui Ming nor Lo Teck Yong participated in any Board of Directors’ meeting relating to the temporary settlement. The terms of the temporary settlement had been announced to shareholders on Bursa Malaysia. Refer to Bursa link: nt/announcement_details?ann_id=3350903

2/ “Bahvest will not be paying the remaining RM7 million to Southsea.”

Truth: The remaining RM7 million refers to the second tranche of the RM13 million negotiated and agreed compensation. The total compensation due is RM13 million after negotiation and not RM20.4 million as alleged. Southsea has already reduced RM7 million from the original letter of demand. Any diversion from the temporary settlement agreed and announced by Bahvest on 10 May 2023 is an act of bad faith and misleading to shareholders.

3/ Legal proceedings between current and former shareholders.

Truth: There is no ongoing court case or material litigation between Southsea and Bahvest, as yet. Thus, there is nothing to run afoul of the sub-judice rule at the moment.

This would seem as an excuse not to answer queries from the media and the shareholders. Bahvest has been attempting to force Southsea to enter into an agreement to sub-lease the additional land on which Bahvest’s fixtures are situated.

On and around 29 May 2023, an envelope containing a draft agreement between Southsea Gold Sdn Bhd and Wullersdorf Resources Sdn Bhd (“Wullersdorf”), a wholly-owned subsidiary of Bahvest was dropped off at Datuk Lo Fui Ming’s accommodation.

The draft agreement states that Southsea grants tenancy to Bahvest for an initial term of three (3) years and is automatically renewable at Bahvest’s discretion for the same rental amount of RM1 million annually until 30 September 2048.

The agreement requires, among other things, that:

1/ Southsea refunds Bahvest the RM6 million compensation paid on 10 May 2023 as part of the negotiated non-refundable deposit for the wrongful occupation.

2/ Southsea waives any and/or all claim against Wullersdorf and/or Bahvest in respect of the wrongful occupation. Datuk Lo has been receiving calls from one of the convenors who requisitioned the EGM, Yong Fen Yoo (also known as Eric Yong) and/or his representatives trying to strongarm Southsea to sign the draft agreement. Datuk Lo had replied that Southsea will consider the draft agreement amongst the Board of Directors of Southsea and respond accordingly.

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