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Friday, September 30, 2011

High noon at E&O AGM?

It is unclear why ECM Libra Financial Group, which first became a substantial shareholder in April, wants to have representatives on the board.

Kuala Lumpur: What happens at Eastern & Oriental Bhd (E&O)'s annual general meeting today is likely to show investors where major shareholders stand on a surprise request to add new directors to the board.

ECM Libra Financial Group Bhd, an investment bank with 6.42 per cent of E&O, has nominated lawyers Mahadzir Azizan and Leong Kam Weng to be directors of the property firm.

It is unclear why ECM, which first became a substantial shareholder in April, wants to have representatives on the board.

It is also thought that authorities are not keen on investment banks to have property businesses, which is one reason why others like OSK Holdings Bhd have split that business away while TA Enterprise Bhd have not pursued investment banking to keep its property operations, analysts said.

ECM's nominations also comes after Sime Darby Bhd has completed buying 30 per cent of E&O for RM2.30 a share, a big premium to the market price. The sellers were E&O managing director Datuk Terry Tham Ka Hon, GK Goh Holdings Ltd and Tan Sri Wan Azmi Wan Hamzah.

Minority shareholders are reportedly unhappy a general offer was not extended to all. Sime Darby has defended the deal, saying it may do so in the future.

That deal as well as other stock purchases by company insiders before Sime Darby's entry are now being investigated by the Securities Commission.

"After 17 days, minority shareholders still don't know what the outcome of the investigation by the SC is, and why it is taking so long for the investigation to complete," said an analyst, who expects minorities to be very vocal at the AGM.

At the meeting, four directors of E&O are seeking re-election. They are Tham, Datuk Azizan Abd Rahman, Vijeyaratnam V. Thamotharam Pillay and Datuk Henry Chin Poy Wu.

E&O shares rose six sen to close at RM1.49 yesterday.

By Business Times

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