PETALING JAYA: Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) president Tan Sri William Cheng will meet Unico Holdings Bhd's board members and ousted director Tan Kai Hee today in an attempt to resolve the dispute over the company's 29.3% stake in Unico-Desa Plantations Bhd (UDP).
StarBiz learnt that Cheng, who emerged as the mediator, would discuss with both sides to work out their differences on what should be done to Unico's equity interest in the public-listed plantation company, to put an end to the row.
The fracas has drawn the attention of the Chinese community in recent weeks when both parties got into a war of words by buying advertisements in the Chinese dailies to voice their arguments.
The bone of the contention is the opposition of Unico's former director Tan, who was not re-elected at the AGM last month, to the company's plan to undertake a capital-reduction exercise, which is followed by the distribution of UDP shares to some 22,200 Unico shareholders.
The resolutions on capital reduction and share distribution were, however, passed at the AGM last month.
Some elderly shareholders, who have held Unico shares for over 10 years, were quoted by the Chinese media as saying that the distribution of UDP shares gave them the opportunity to cash out in the open market.
This was also the stance of Unico chairman Tan Sri Lim Guan Teik and four directors Tan Sri Ngan Ching Wen, Mew Jin Seng, Teoh Hock Chai and Dr Yeoh Cheong Thye on the rationale of the resolutions.
Unico's paid-up capital will shrink to only 10% of its existing RM100mil after the capital reduction.
Shareholders will then receive 2,560 UDP shares for every 1,000 shares in Unico.
Tan, Hai-O Bhd group managing director, was opposed to the resolutions because he alleged the five Unico directors had accumulated UHB shares ahead of the exercise, according to the Chinese media.
Besides Unico, ELK Group Sdn Bhd, which is controlled by Teoh, and Yeoh were the next largest shareholders in UDP, according to the company's annual report. Teoh and Yeoh held 28% and 21.5% stake respectively in UDP as at June 29.
Unico has trimmed its shareholding in UDP to 29.3% from nearly 43% in 2000.
Tan argued that Unico should hold on to its stake in UDP so that it could benefit from the strong crude palm oil price.
Given that UDP was the major income contributor, he was worried that the exercise would create a vacuum in Unico's income stream.
But Tan indicated that a better alternative was to sell the stake en bloc to fetch a premium price if the board insisted on disposing of the equity interest in UDP.
UDP's share price soared when speculations were rife that the stake was up for sale. The stock climbed to a historical high of 95.5 sen on Wednesday before it closed at 87 sen yesterday. The stock has soared 61% year-to-date.
Like it or not, shareholder tussle is not new to Unico.
Back in November 1999 when UDP floated its shares on the Kuala Lumpur Stock Exchange, a group of shareholders disagreed with the choice of UDP as the listing vehicle instead of the holding company, Unico.
They were also opposed to the allocation of UDP's proposed restricted and bonus shares issue to 17 directors that would effectively reduce their acquisition price of each UDP share to 64 sen from RM1.50.
The dispute made newspaper headlines then.
Unico was formed in 1981 following a memorandum of understanding between Koperasi Pembangunan Desa Sdn Bhd and ACCIM to jointly develop a piece of land.
UDP was then incorporated as a private limited company entrusted with planting oil palm on a piece of land in Kretam, Sabah.
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