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.

Ire-Tex: MD resigns and is reappointed same day

A remarkable set of events, the company has provided the following clarification:


Reference is made to the Company’s announcement on 29 June 2015 in relation to the retirement of Dato’ Dr Yap Tatt Keat (“Dato’ Dr Yap”) as Managing Director and his subsequent re-appointment on the same day.

The Board of Directors wishes to inform that Dato’ Dr Yap had expressed his intention for early retirement effective from 29th June 2015, post the Company's 13th Annual General Meeting (“AGM”) after 20 years of service with the Ire-Tex Group. Hence, he did not offer himself for re-election at the AGM.

However, due to concerns raised by key stakeholders namely bankers, customers and suppliers, to Dato’ Dr Yap's unexpected early retirement, the Board of Directors had persuaded Dato’ Dr Yap to defer his retirement plans. Consequently, in the best interest of Company, Dato’ Dr Yap had accepted his re-appointment as Managing Director of the Company in the Board meeting held immediately after the AGM. As such, he will remain in the Board until a succession plan is put in place.


Ire-Tex is a company with several, possibly large, problems.

It has just acquired subsidiaries which don't seem to be performing well at all:

There was a large variation in results, always a red flag:

Many changes in directorship in the last year:

 

 

The accounts were qualified (always a large red flag):

In addition to that, the following "emphasis of matter":

An investigative accountant has been appointed, with a very wide scope, 28 action points in total, including allegations in an anonymous letter.

The largest shareholder of Ire-Tex is Tey Por Yee, the third largest is Ooi Kock Aun, the same duo we already met in the Protasco affair: