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Saturday, December 29, 2007

Shareholder seeks removal of entire GPlus board

PETALING JAYA: Indian Corridor Sdn Bhd, Golden Plus Holdings Bhd's new major shareholder with an 11.8% equity interest, will seek the removal of the Bursa Malaysia-listed company's entire board at an EGM to be convened on Jan 26.

In a statement to Bursa, GPlus said it had on Thursday received notice from Indian Corridor and Pembangunan Qualicare Sdn Bhd (PQ) proposing to remove chairman Datuk Abdul Halim, executive directors Low Thiam Hoe and Goh Sin Tien, and independent non-executive directors Tan Sri Lamin Mohd Yunus, Jeyaraj V. Ratnaswamy and Yeoh Hor San.

It is not known how big a stake PQ has in the property developer.

The major shareholders have also proposed to appoint Tan Sri Mohd Jamil Johari, Datuk Sharir Abdul Jalil, Mohamad Zekri Ibrahim, Datuk Ooi Kee Liang and Loh Chye Teik as directors of GPlus.

StarBiz understands that the hostility arose as a result of unhappiness over the management agreement GPlus subsidiary Yanfull Investments Ltd (YIL) signed with China Idea Development Ltd (CID) on July 25.

Indian Corridor, which emerged as the single largest shareholder on Dec 19, considered the agreement “unjustifiable” for GPlus, a source told StarBiz.

The agreement is to engage Hong Kong-based CID to provide services in relation to the management and day-to-day operations of YIL unit, Yanfull (Shanghai) Co Ltd (YS), which is involved in a high-end property development project in Shanghai, China.

The Chinese project is seen as GPlus's core income-generating asset.

Under the agreement, CID was required to reimburse YIL a sum of RM650 per sq m (psm) from sales of the properties. The payments start after CID achieves 40% of the gross saleable area based on each of the four phases.

It is believed that Indian Corridor is against the agreement because the reimbursement rate is too low versus the market price, which is said to be about 15,000 yuan (RM6,832) psm, or more than 10 times the agreed amount.

After incurring losses for the past seven consecutive quarters, GPlus turned profitable in the quarter ended Sept 30, posting a net profit of RM21.5mil on higher revenue of RM136.2mil.

The board attributed the improvement to contributions from phase two of the Royal Garden development project in Shanghai.

The source said GPlus' earnings would have been much higher if the sales revenue it was collecting from Shanghai was more in line with the market price.

The share price of hardly traded GPlus has been soaring since September.

The stock hit a high of RM2.21 in September from under 60 sen in August. It closed five sen lower at RM1.72 yesterday.

By The Star (by Kathy Fong)

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