Eng Wah Organisation – Lack of Transparency

Date: August 22, 2008

Minority shareholders are unhappy with the lack of transparency with regard to the proposed asset sales arising from the RTO. Their complaint is that the process of sale is not transparent. There is a potential conflict of interest as the controlling shareholder has expressed interest in buying the Company’s major assets which comprise mainly of properties.

In our view, the Company must ensure that its assets are sold at a fair price and not at a sub-optimal price to the controlling shareholder. Minority shareholders have yet to see the efforts on the part of the Company to satisfy this basic expectation, except for one advertisement in February this year, calling for expressions of interest. It is not obvious that the Company has made all efforts to realise its assets at the maximum price.

The Company must ensure that the interests of minority shareholders are not compromised in any way. The role of the independent directors in a situation like this becomes crucial in ensuring just that. They must ensure that the sale price is maximized. The Company is under an obligation to be transparent and to protect the interest of its shareholders.

David Gerald J.

President & CEO
for Management Committee, SIAS