Plot thickens at Harvest

KUALA LUMPUR: The embattled chief executive of Harvest Court Industries Bhd, Datuk Raymond Chan, made public a taped conversation that he claims proved that parties out to oust him controlled more than 33% of the company and were avoiding a mandatory general takeover (MGO).

Chan, in a press conference here yesterday, disclosed details of the conversation he claimed he recorded with Datuk Eddie Chai Woon Chet, who is seeking an EGM to remove several directors and appoint new members, including himself, to the board.

“It is either he (Chai) is lying or I am lying. But I have on recording Chai clearly stating that he has 33% or 34% of Harvest Court shares.”

In the recorded conversation between Chan and the person he claimed to be Chai, the latter claimed he had 33% or 34% of Harvest Court shares.

In the same recording, Chai was also heard saying that Kenneth Vun, a former major shareholder of FTEC Resources Bhd, had 10% of Harvest Court shares and was supporting him.

A transcript of the conversation that took place on May 14 was distributed to the press yesterday.

The latest revelation in the control for Harvest Court adds more spice to the boardroom battle between Chan, Chai and Vun – all three from Sabah.

According to the listing requirements, shareholders with more than 5% of a company should disclose their interest.

Harvest Court’s filings showed that Chai had a 20.95% interest in the company via his private investment vehicle, Zenith City Investments Ltd.

The controversy has thrust the spotlight on Vun because he does not appear to hold any shares in Harvest Court based on announcements.

Vun was charged with misusing part of the proceeds of FTEC’s public listing in 2007 and since then has stayed away from the corporate limelight.

Chai had denied last month allegations that he and his associates had a controlling stake in the company, and that he had told Chan that Vun owned 10% of Harvest Court.

To back up his denial, Chai had on June 30 served a legal suit against Harvest Court and its six directors, including Chan, claiming that the group had defamed him by making an announcement that he and his associates controlled more than 33% of Harvest Court and were avoiding an MGO as required under the rules.

But Chan is fighting back based on Harvest Court’s latest announcement.

Yesterday, the company announced to Bursa Malaysia that it had filed a suit on July 11 against Zenith, Chai and 32 others for their failure to make an MGO to the company’s shareholders, hence breaching Section 9(1) of the Malaysian Code on Take-Overs and Mergers, 2010.

Asked on his next course of action, Chan said Harvest Court would file an application to strike out the defamation suit filed by Chai, as well as seek a court declaration to deem a notice to call for an EGM on Aug 8 null and void.

“Chai came to see me on May 9 and 14 to demand for seats on the board. He informed me that he had 33% or 34% of Harvest Court shares. Under such circumstances, he is required to make a general offer,” Chan stressed yesterday.

Chan alleged that Chai was trying to shortchange the company’s shareholders by trying to circumvent an MGO despite having sufficient shareholdings directly and via his associates to trigger an MGO as required under the Malaysian Code on Take-Overs and Mergers, 2010.

Chan confirmed that the company had received a notice to convene an EGM by Zenith and Syawaras Sdn Bhd on July 4, but had not circulated the notice to Harvest Court’s shareholders.

In the notice, Zenith and Syawaras are seeking to replace a few members of the current board with Datuk Seri Abdul Azim Mohd Zabidi, Wong Kwai Wah and Chai himself.

Chan contended that Chai was not taking the proper steps to convene the EGM.

“He is forcing his way in with no regard to other shareholders. Without obtaining the list of shareholders, Zenith and Syawaras rushed ahead to advertise the notice of meeting for the EGM when they have no means to circulate the notice properly to all shareholders,” Chan said.

Harvest Court confirmed that a bundle of 4,800 pieces of Notice of Meeting and an instruction to circulate the notice to shareholders was delivered to Harvest Court’s registered office last Friday.

But Chan contends that according to the law, Chai and his associates must undertake to inform shareholders themselves.

Meanwhile, Chan said he had a “medium to long-term plan” to improve the prospects of Harvest Court. He added that the company was expected to turn around in the next 12 to 18 months.

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