Sunday, 5 July 2015

Ire-Tex: MD resigns and is reappointed same day (2)

Interesting article by Errol Oh in The Star: "A pattern of turbulence".

The article zooms in on the events at the Ire-Tex AGM, but also those at Wintoni Group's AGM, some snippets:

Wintoni Group Bhd held its latest AGM on June 26. Seven resolutions were tabled but the majority of the shareholders at the meeting approved only two – the ones on the directors’ fees and the reappointment of the auditors.

The four directors who were up for re-election didn’t get enough votes and the company, a provider of automation systems, subsequently announced their retirement. It didn’t end there though.

On the same day, all four were appointed to the board and they assumed their previous roles. Retired lieutenant general Datuk Khairuddin Mat Yusof returned as non-executive chairman. Soo Tee Wei was reinstated as executive director. Mohd Sopiyan Mohd Rashdi and Ansari Abdullah continue as independent directors and members of the audit and nomination committees. It’s as if the AGM outcome was a mere blip.

From a corporate governance point of view a rather remarkable set of events, to put it mildly.

The article continues:

The similarities between Ire-Tex and Wintoni draw attention to Tey [Datuk Larry Tey Por Yee] as an investor because in the past couple of years, he has surfaced as a substantial shareholder in several listed companies: Ire-Tex, Wintoni, Protasco Bhd, Asdion Bhd and Malaysia Pacific Corp Bhd.

And then the writer details the diversification plans and the "signs of turbulence" for the above five companies.

Instead of "diversification" the term "diworsification", coined by investor Peter Lynch, might be more appropriate:

"when a company diversifies its business so broadly, it lacks a core focus. Management becomes distracted by the different, unrelated operations, and the whole firm begins to suffer."

Tey Por Yee did by the way also invest in Maemode, but that company went under so fast that there might not have been time for a diversification.

For students in CG, Tey Por Yee is definitely an interesting person to follow.

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