Chua: Scope-Matang deal not an ‘asset stripping’ exercise
(The Star) – The reverse takeover deal between Scope Industries Bhd and Matang Holdings Bhd is not an “asset stripping” exercise by the MCA, said its president Datuk Seri Dr Chua Soi Lek.
The share exchange between the two companies, he stressed, would result in a reverse takeover of Scope Industries by Matang Holdings.
“Such a deal is meant to add value to Matang shares. It (the deal) does not involve the sale of assets belonging to Matang Holdings.
“It is wrong to construe this transaction as asset stripping by MCA. Hence, it was not tabled in the MCA central committee meeting for deliberation nor did it need the two-thirds approval of the central committee,” said Dr Chua in a statement here Tuesday.
Matang Holdings was set up on April 3, 1978, as a public limited investment holding company with the principal objective of fostering inter-communal economic cooperation.
MCA’s investment arm Huaren Holdings has an approximate 10% stake in the company.
It was previously reported that several DAP leaders had criticised the deal as a possible move by MCA to dispose its assets.
Dr Chua said as MCA president, he did not have the right to call off or stop the Matang Holdings’ extraordinary general meeting (EGM).
Although MCA via Huaren Holdings had about a 10% stake in Matang Holdings, he said the remaining 90% of shareholders might still support the proposed transaction.
He also took Parit Sulong MCA chief Datuk Tan Teck Poh to task, asking him to stop politicising the reverse takeover deal.
“If Tan has a better proposal on the reverse takeover of Scope Industries by Matang Holdings, he should table his proposal in black and white to all shareholders for consideration during the EGM, which will be held on May 31,” said Dr Chua.
Dr Chua said MCA, through Huaren Holdings, would be happy to consider if there was a written proposal tabled by Tan in the EGM.
“I am disappointed with Tan, who is obviously not familiar with the rules and regulations of the company’s EGM,” he said.
Meanwhile, several MCA central committee senior members, including party deputy president Datuk Seri Liow Tiong Lai, are against the proposed takeover of Matang Holdings by Scope Industries.
Liow said MCA’s investment arm Huaren Holdings should look for the deal that would serve the best interest of minority shareholders.
“Failing this, MCA will be letting down its members, especially those who have held on to Matang Holdings shares for over 30 years.
“This could even be another blow to the party, which has already undergone a punishing experience in the recent general election,” he said in a statement here yesterday.
Liow said he believed the focus now should be on re-consolidating and re-invigorating the party, and not “weakening it further by disposing of valuable assets such as Matang Holdings”.
He also strongly insisted that the Matang Holdings’ extraordinary general meeting (EGM) set for May 31 be cancelled.
“Based on the MCA’s constitution and a statement by the president (Dr Chua) on May 21, the disposal of party assets can only be done with the approval of at least two-thirds of the party’s central committee.
“However, until today, the MCA treasurer-general has neither tabled the proposal to the CC nor obtained its approval,” he said.
A significant discrepancy, added Liow, was also discovered between the two valuation reports on the property value of Matang Holdings.
“This, in itself, has raised alarms and created concern among shareholders that it will be an inequitable deal that will leave them out in the cold,” he said, adding that Matang Holdings was a stable, debt-free company with RM25mil in liquid assets.
“Unfortunately, the shareholders will not reap the benefits of the company’s fortunes via dividends as the entire amount will be summarily transferred to Scope Industries as part of the deal,” he said.
Shareholders, said Liow, would also not be able to dispose of their shares as there was a four-year share lock-up period after the proposed takeover.