Date: October 3, 2023
To: The Board of Advanced Holdings
I am writing to you on behalf of baffled minority shareholders of Advanced Holdings regarding the capital reduction exercise that the company had proposed on 23 Aug 2023.
In that announcement which was signed by your managing director Dr Wong Kar King, it was stated that the aim of the reduction was to (i) write off accumulated losses of the company amounting to S$15.18m as at 31 December 2022 and (ii) return to Shareholders surplus capital of the Company in excess of its needs by way of a cash distribution of approximately 23.2 cents for each ordinary share.
It therefore came as a shock to shareholders that the proposal did not succeed at the extraordinary general meeting (EGM) held on 29 Sep 2023.
What has mystified shareholders is that the number of shares that voted against the proposal was 41,405,109 – almost the exact number held by Dr Wong, which was 41,402,109 as disclosed on page 13 of the 7 Sep 2023 Letter to Shareholders.
In other words, it appears to observers that your Managing Director (MD) having initially proposed the capital reduction exercise, then changed his mind and voted against it.
As a result, the Securities Investors Association of Singapore (SIAS) would, on behalf of your minority shareholders, like the Board to clarify the following:
- Who exactly proposed the capital reduction?
- Was there unanimous support within the ranks of the Board and senior management, including Dr Wong, for the exercise?
- What due diligence was conducted prior to going ahead with the proposal?
- What is the nature of the working relationship between the MD and the Board? In this connection, could the Board provide shareholders with an assessment of the MD’s performance, including the effectiveness of communication between the two parties, as well as his commitment towards creating value for shareholders?
- Have there been any major differences between management and the Board on strategic issues or business plans?
- A shareholder who attended the EGM has reported that the MD left in the middle of the meeting and the chairman told those present that the reason for the MD’s departure was that “he was not feeling well’’. Are there plans to conduct a special audit on the events surrounding the EGM and the apparent change of heart by the MD?
- In the original announcement, Dr Wong and the Board stated that the “Directors are of the view that the Capital Reduction would serve to rationalise the balance sheet of the Company to reflect more accurately the value of its underlying assets, and thus the financial position of the Company’’.
Now that the proposal has failed, how will the company accomplish the above objectives?
SIAS should be pleased to receive your answers to the above questions.
Founder, President and CEO