Lawyers to file response to suit against nine EON Cap board members soon

  • Business
  • Wednesday, 30 Jun 2010

PETALING JAYA: Three lawyers have been appointed to represent the directors of EON Capital Bhd (EON Cap) who have received a legal suit from major shareholder Primus Pacific Partners (HK) Ltd in protest of an offer for the bank’s assets and liabilities by HONG LEONG BANK BHD (HLB).

The lawyers are believed to be E. Sreesanthan of Kadir, Andri & Partners (representing Rin Kei Mei); Gopal Sreenevasan of Sreenevasan Young (representing Tan Sri Tiong Hiew King) and Tan Sri Cecil Abraham of Zul Rafique & Partners (representing the seven new independent directors).

Sources said they would be filing their affidavits and replies soon in response to the suit filed last week by Primus against nine board members of EON Cap, excluding Ng Wing Fai (who represents Primus), and three entities controlled by Rin and Tiong.

The Kuala Lumpur High Court has set a return date on July 6.

The Primus suit basically claims that the manner in which the offer was proposed to be implemented was unlawful.

Rin, Tiong and Khazanah Nasional Bhd collectively own 41.7% in EON Cap and have obtained permission to negotiate for the sale of their stakes to HLB.

Primus had bought its stake of 20.2% at a 55% discount, or RM9.55 per share, which is in sharp contrast to the cash offer of RM5.06bil or RM7.30 per share from Hong Leong.

Primus is also making the directors of EON Cap personally liable, should the deal with HLB pass through in an upcoming EGM, which has subsequently been postponed.

In its petition, Primus is suing the EON Cap directors for RM1.11bil in damages or such other sum as the High Court might assess, as it believed that the price for EON Cap should be much higher than that offered by HLB.

While the previous board of directors at EON Cap had decided not to table the “undervalued’’ offer to shareholders (previously HLB had offered RM4.9bil or RM7.10 per share), the new board that includes the seven new independent directors had decided the offer was “within the range” and should be tabled to shareholders.

Under the assets and liabilities route, shareholders’ approval of 50% plus one vote was sufficient for the deal to go through.

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