Multi-Usage suspends two directors as part of probe

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KUALA LUMPUR: Multi-Usage Holdings Bhd’s (MUH) board has decided to suspend two directors, Gerald Mak Mun Keong and Tan Chew Hua, for two months as part of an investigation.

The property developer and building material manufacturer said Mak, an independent, non-executive director, was suspended to “investigate his independence.”

Tan, a non-independent and non-executive director, was suspended to “investigate into the matters highlighted in the qualified auditors’ report and the special audit report,” MUH said in a filing with the bourse.

“The board authorised the Nomination Committee to lead the investigation into the above matters,” the company said.

In May, MUH had lodged a police report against Tan for possible breaches of the penal code in respect of the purchase of properties from MUH’s unit TF Land Sdn Bhd, 

Subsequently, in October, Deloitte, the company’s external auditors, expressed a qualified opinion in its report in respect of the findings of a special audit conducted in response to complaints filed against certain directors of the MUH group.

The special audit report, issued in February this year, relates to debt restructuring exercises carried out by MUH in 2008 and 2008 by signing agreements with a special purpose vehicle (SPV) and its lenders. 

According to the special audit, an MUH director appeared to have signed on the SPV’s general cash vouchers and letter containing SPV’s cheque information issued to a financial institution, and the SPV helped a MUH director to settle his personal guarantee with a financial institution.

Deloiite said: “We were unable to obtain sufficient appropriate audit evidence to determine the nature and extent of relationship that may exist between the company and the SPV by virtue of the said transactions and the debt restructuring exercises. Consequently, we were unable to reach a conclusion to support the assertions made by the directors in Note 35(b) to the financial statements that the company had no control over the SPV; that the transactions between the group and SPV are not related party transactions and that the matters highlighted in the special audit report have no immediate financial impact to MUH Group since these matters are all historical events.”

The announcement on the two directors’ suspension came on the same day that MUH gave notice of its upcoming AGM on Dec 21, where the resolutions to reelect Mak and Tan as directors were not included.

In October, the Companies Commission of Malaysia (SSM) had rejected MUH’s application to convene the AGM latest by Dec 31, 2016.

Under SSM’s Practice Note 2/2008, a company is required to hold an AGM in every calendar year and the AGM must be held not more than 15 months after the last preceding AGM. The last time MUH held its AGM was on June 29, 2015.

It is unclear whether SSM subsequently approved the AGM being held in December, as there was no MUH announcement on Bursa Malaysia’s website saying that SSM rescinded its earlier decision.