Bid to stop Scanwolf from holding EGM to remove directors

KUALA LUMPUR: Scanwolf Corp Bhd, which seeks to remove three directors at an EGM on May 13, has received court documents to restrain it from holding the meeting.

In a filing with Bursa Malaysia on Thursday, the plastic extrusion manufacturer said it had on May 6 and 7 received a writ of summons and statement of claim as well as a sealed notice of application on the application for injunction relief from a Yeoh Kean Beng.

The EGM - requisitioned on April 8 by shareholders Abdul Hamid Abdul Shukor, Cedric Wong King Ti and Yii Long Ging - seeks to remove three directors who were appointed following the emergence of Better Project Management Sdn Bhd as Scanwolf's biggest shareholder on Aug 7, 2014. The meeting in Ipoh is also to approve the appointment of three directors.

The directors to be removed are Chang Nyen Wee (appointed on Aug 29, 2014 by virtue of his deemed interest in Better Project Management), Datuk Ch’ng Kong San (appointed Scanwolf managing director on Nov 11, 2014), and Chua Kiat Eng (appointed Aug 29, 2014 but who last week resigned due to “personal commitment”). 

Scanwolf, via the EGM, also proposes to appoint Hamid, Mua’amar Ghadafi Jamal Jamaludin and William Wong King Nguong as directors with immediate effect. No reason was given for the six resolutions.

The notice of application has been fixed for hearing on Monday next week at 9am.

Scanwolf said in its statement to the exchange that it would seek advise from its solicitors and take the appropriate action.

Scanwolf has been in the spotlight in the last two weeks for possible irregularities in the implementation of development projects. PKF Covenant Sdn Bhd, which conducted an investigative audit, has found “possible irregularities in the company and certain of its subsidiaries in its property development division.”

In addition, Scanwolf has received two unusual market activity queries this year due to the rise in its trading price and volume. Both times the board of directors and major shareholders were not aware of any possible explanation.

PKF Covenant’s preliminary report said that, among others, there appeared to have been no record of deliberation by the board before the joint development agreement with Almal Development (M) Sdn Bhd (ADSB) that was executed on May 26, 2011 and no formal valuation of the land concerned.

The report also said there might have been a possible conflict of interest arising from an undisclosed relationship between a former director of the company and ADSB, which was in existence at the relevant times when the joint development agreement was entered into.

It said there also appeared to have been cash payments made by Scanwolf subsidiary Scanwolf Development Sdn Bhd to open fixed deposit accounts under a former director of the company in order to procure bank guarantee facilities, which were instead supposed to have been paid by the said director.

Scanwolf closed 2 sen higher at 80 sen on Thursday.