EON Capital did not say why Bank Negara denied Ng Wing Fai, the managing director of Primus, a seat on the board
Bank Negara Malaysia has denied Ng Wing Fai a seat on the board of EON Capital Bhd (EONCap) (5266), the latest blow to Hong Kong-based Primus Pacific Partners that is now resisting a takeover bid from Hong Leong Bank Bhd.
The rejection of Ng, the managing director of Primus, was conveyed by Bank Negara Malaysia (BNM) in a letter, EONCap said in a statement to Bursa Malaysia yesterday.
It also comes two months after the expiry of his term on July 29. EONCap did not say why BNM said no to Ng and sources said the letter also did not have an explanation.
But sources said it has to do with corporate governance concerns and the broken promises of Primus since it bought a 20.2 per cent stake in EONCap in early 2008.
Primus could appeal or "appoint someone else to represent them," one of the sources said.
In July this year, Ng and three other Primus executives were barred from being directors of a company set up to buy Taiwan's third biggest insurer. This was due to failure to provide documents to prove they are not residents of mainland China, according to a report in the South China Morning Post.
As at press time, Primus did not respond to questions sent by Business Times.
Primus is opposing the RM5.06 billion takeover of EONCap by Hong Leong. The deal has been approved at a shareholders' meeting but it still needs to clear the hurdle of an ongoing court case where Primus claims the takeover is unlawful and EONCap directors are not acting in the best interest of the bank.
The case itself has produced interesting revelations like the fact that Primus had borrowed money from Public Bank Bhd to partly pay for its stake in EONCap. Primus was expected to bring in fresh money for the deal, sources said.
Ng also told the court that he recorded board meetings without the knowledge of other directors of EONCap.
Primus entered into EONCap in early 2008, bullish on Malaysia's banking scene and it had plans to grow the group with partners from the Middle East and China. This quickly unravelled amid the 2009 global recession.
In early 2009, Primus did not subscribe to a RM655 million bond and warrants issue as promised, angering the central bank, according to reports.
BNM also asked EONCap to repay a US$225 million (RM695 million) bond only after it received money from the bond-warrants issue. But it redeemed the US bond without fresh funds coming in, causing a temporary fall in capital adequacy ratio to about 9 per cent.
The central bank demanded a probe that led to the departure of EON Bank's chief executive officer Albert Lau.
Since then, the fallout between Primus and its two other major shareholders, Rin Kei Mei and Tan Sri Tiong Hiew Khiing, has provided an opportunity for Hong Leong to make a takeover offer.
The rejection of Ng, the managing director of Primus, was conveyed by Bank Negara Malaysia (BNM) in a letter, EONCap said in a statement to Bursa Malaysia yesterday.
It also comes two months after the expiry of his term on July 29. EONCap did not say why BNM said no to Ng and sources said the letter also did not have an explanation.
But sources said it has to do with corporate governance concerns and the broken promises of Primus since it bought a 20.2 per cent stake in EONCap in early 2008.
Primus could appeal or "appoint someone else to represent them," one of the sources said.
In July this year, Ng and three other Primus executives were barred from being directors of a company set up to buy Taiwan's third biggest insurer. This was due to failure to provide documents to prove they are not residents of mainland China, according to a report in the South China Morning Post.
As at press time, Primus did not respond to questions sent by Business Times.
Primus is opposing the RM5.06 billion takeover of EONCap by Hong Leong. The deal has been approved at a shareholders' meeting but it still needs to clear the hurdle of an ongoing court case where Primus claims the takeover is unlawful and EONCap directors are not acting in the best interest of the bank.
The case itself has produced interesting revelations like the fact that Primus had borrowed money from Public Bank Bhd to partly pay for its stake in EONCap. Primus was expected to bring in fresh money for the deal, sources said.
Ng also told the court that he recorded board meetings without the knowledge of other directors of EONCap.
Primus entered into EONCap in early 2008, bullish on Malaysia's banking scene and it had plans to grow the group with partners from the Middle East and China. This quickly unravelled amid the 2009 global recession.
In early 2009, Primus did not subscribe to a RM655 million bond and warrants issue as promised, angering the central bank, according to reports.
BNM also asked EONCap to repay a US$225 million (RM695 million) bond only after it received money from the bond-warrants issue. But it redeemed the US bond without fresh funds coming in, causing a temporary fall in capital adequacy ratio to about 9 per cent.
The central bank demanded a probe that led to the departure of EON Bank's chief executive officer Albert Lau.
Since then, the fallout between Primus and its two other major shareholders, Rin Kei Mei and Tan Sri Tiong Hiew Khiing, has provided an opportunity for Hong Leong to make a takeover offer.
By Shahriman Johari
Business Times
The Central Bank announced on Tuesday that the refinancing rate would remain at 7.75% and that other key rates would remain unchanged, indicating this would "maintain a balance between macroeconomic risks in the coming months."
ReplyDeleteThe refinancing rate has been at 7.75% since June 1 after 14 consecutive cuts over 15 months. The announcement by the Central Bank comes after inflation picked up during September, rising 0.6% to 6.7% annually, on the back of the summer heatwave and drought.
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