Benalec misses deadline to execute settlement agreement

by **Cals** Tue 07 Jan 2014, 18:32

Business & Markets 2014

Written by Charles Yong of theedgemalaysia.com

Tuesday, 07 January 2014 09:44

KUALA LUMPUR: The deadline is over and Benalec Holdings Bhd has yet to execute, let alone announce, its final settlement with the parties it had accused of misconduct.

A source told The Edge Financial Daily that the settlement is being reviewed by the regulators.

“Bursa Malaysia has asked the company to furnish it with details of the settlement. It will be announced in due course,” said the source, who did not disclose a specific date by which Bursa would revert to Benalec.

Benalec had on Dec 4, 2013, signed a heads of agreement (HoA) with three parties that it had sued earlier — Datuk Leaw Tua Choon, Datuk Leaw Ah Chye and Tua Choon’s son, Leaw Yongene — to set out a framework to settle all legal suits, grievances, disputes and claims among them.

The company had announced to Bursa on Dec 4 that it had set for itself a month’s deadline to “finalise the detailed terms of a full and final global settlement of all disputes [between the related parties] and to execute the final settlement agreement.”

Benalec stripped the two brothers of their executive positions in October after an independent audit committee found “strong and compelling” documentary evidence linking them to two land disposal transactions in which they had links to the purchasing entities.

The committee then called for an EGM to remove Tua Choon and Ah Chye as directors before they resigned from the board in a “gesture of goodwill”.

In a filing with Bursa last Friday, Benalec announced that Tua Choon had two weeks ago sold his entire 14.81% indirect stake in the company to the third brother, Datuk Vincent Leaw Seng Hai, and Ah Chye.

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Vincent Leaw and his brother Ah Chye bought a stake from Tua Choon.

Vincent’s stake in Benalec subsequently increased from 15.34% to 23.71% and Ah Chye’s from 14.81% to 21.26%. Tua Choon ceased to be a substantial shareholder. The price of the shares transacted was not disclosed.

Ah Chye further granted Vincent, who is Benalec’s managing director and largest shareholder, the option to purchase at least 30% of his indirect interest in the company. Should Vincent exercise the option, his stake would increase to at least 30%.

In a separate announcement last Friday, Benalec said it offered its three independent non-executive directors — Aznam Mansor, Koo Hoong Kwan and Wong Yoke Nyen — options of 200,000 shares each at an exercise price of 78 sen. This is a 10.3% discount to Benalec’s share price of 86 sen on the offer date. Benalec’s shares closed 6.36% higher at 92 sen yesterday.

This article first appeared in The Edge Financial Daily, on January 07, 2014.