Caught Between Two Hats

Protasco Bhd. Chairman and MACC Chairman of OEP Tan Sri Hadenan Abdul Jalil

Malaysian Anti-Corruption Commission Chairman for Operation Evaluation Panel Tan Sri Hadenan A Jalil in a deep conundrum when it comes to the boardroom tussle between key personalities of Protasco Berhad.

Hadenan who is the Chairman of the listed company which principle business activities diversify between road construction, property development and education, have to preside on the upcoming two EGMs.

The first EGM was called by the some of the board members for 26 November 2014 is for the removal of two independent non-executive directors Adrian Ooi and Larry Tey.

The Malaysian Reserve story:

Accusations fly at Protasco

Wednesday, 29 October 2014 13:04 P Prem Kumar 0 Comments

Shareholders representing 10.52% of the construction company filed a petition to remove two directors of the company, Tey Por Yee and Ooi Kock Aun. The company had already in September filed a RM89 million lawsuit against Tey and Ooi and Indonesia-based PT Anglo Slavic Utama (PT ASU).

Responding to the petition, Tey and Ooi came out in public to accuse Protasco’s managing director Datuk Seri Chong Ket Pen of inappropriate behaviour involving kickbacks.
Tey told a Press conference yesterday that the lawsuit against him was “entirely a plot by Chong to oust me and my partner from the board of Protasco.”

Tey claimed that some parties are “afraid” of him because he is the second largest shareholder in the company, with 18% of its entire paid-up capital under his control.

“I was pointing out what was wrong in the board. There were some financial issues where I was not satisfied with the way Chong and the top management were handling the case,” an emotional Tey said in his lawyer’s office in Kelana Jaya.

Tey also claimed that PT ASU informed him that certain board members gained financially in deals with the Indonesian company involving oil, bitumen and coal trading.

Tey released details of the deals he said channelled money to back to some directors.

Tey, via his vehicle Kingdom Seeker Ventures Sdn Bhd had yesterday filed a derivative action for the benefit of Protasco to recover RM10 million from Chong, and other senior managers.

Tey said he had tried calling for a emergency board meeting on October 27th, however was rejected due to short frame of time.

Protasco has fixed October 31st to hear Tey’s allegations against Chong.

“Chong has betrayed the trust of Protasco shareholders. We are being made the scapegoat to cover this major breach of the shareholders’ trust,” he said.

In light of this, Tey is set to call for an extraordinary general meeting (EGM) to present the evidence to shareholders, and ask for the removal of Chong, as Protasco managing director and executive director.

“We will in the next few days notify the shareholders when the EGM will be held. Most probably in the last week of October or the first month of November,” said Tey.

Tey also claimed that the petition to remove him from the board came from Chong and his supporter.

“Now, I know the real reason for the lawsuit – it is really just a board room fight and they want to remove me, who have invested close to RM100 million in Protasco. I am a substantial shareholder and a threat to Chong,: he said.

In a statement to Bursa Malaysia yesterday, Bursa Malaysia said it has received a suit against the company as well as Datuk Seri Chong Ket Pen and several others by a company which is controlled by Tey.
The company said the suit is making a claim for the return of RM10 million and damages against Protasco.
In 2012, Protasco agreed to buy a stake in PT ASU subsidiary as it ventured into the lucrative oil and gas business. However the deal fell through and Protasco terminated the agreement in August this year.
Protasco then proceeded on to sue PT ASU, Tey and Ooi on Sept 22, 2014, for conspiracy to defraud Protasco and making secret profit.

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Initially, on 29 October Ooi and Tey requested for Dato’ Sri Ir. Chong Ket Peng to be removed as director and automatically as the Group Managing Director. These shareholders called for an EGM on 28 November.

As a reaction, a BoD meeting was called on 31 October. Ir. Chong engineering another director Tan Heng Kui who is affiliated to him for the pre-emptive EGM now slotted on 26 November.

The Star story:

Tey seeks to remove Chong from Protasco

Friday, 31 October 2014

PETALING JAYA: Protasco Bhd’s non-executive director Tey Por Yee (pic) wants to remove managing director Datuk Seri Chong Ket Pen as a director of Protasco and is calling for an EGM for this purpose.

“The facts and evidence of Chong’s (alleged) wrongdoing will be brought directly to the shareholders via an EGM that is being fully funded by myself. I am paying for the cost of the EGM with my own money,” Tey said in a statement.

“Chong, on the other hand, through his shares in UOBM Nominees (Tempatan) Sdn Bhd wants to instigate Protasco to call for an EGM at Protasco’s cost to remove me and Ooi Kock Aun. This action of Chong again calls into question his motive and him hiding behind Protasco and other entities as he covers up his activities,” Tey added.

UOBM Nominees (Tempatan) and Tan Heng Kui, who own 8.99% and 1.52% in Protasco, respectively, had three days ago called for an EGM to remove Tey and Ooi.

Tey, in turn, said the EGM called by him was necessary, alleging that there was evidence of Chong having received financial gains from Protasco’s oil and gas dealings with PT Anglo Slavic Utama (PT ASU), which was entered into Tey and Ooi’s defence on Oct 28.

Section 145 of the Companies Act 1965 states that two or more shareholders holding not less than one-tenth of the paid-up and issued share capital of the company may call for a meeting of the company.

Protasco had in September launched a legal suit against PT ASU and Tey and Ooi, to claim for a refund of the purchase price paid under the restated sale and purchase agreement dated Jan 28 from PT ASU and/or damages – and/or for damages – arising from the breach of contract.

Protasco’s claim against Tey and Ooi is premised on allegations that they have breached their fiduciary and statutory duties, including the duty to disclose their interest in the transaction, conspiracy to defraud Protasco and the making of secret profits.

Both Tey and Ooi have denied all allegations made against them.

“The lawsuit that Protasco took out on Ooi and myself as per their announcement on Sept 22 is a cover-up for their intention to remove me from Protasco. In a board room fight, both parties should be prepared to be upfront and use (their) own money to fund a legal counsel and convene company meetings,” Tey claimed.

Tey also claimed that he had called for an emergency Protasco board meeting to present the facts and evidence of this wrongdoing and ask for the board to take action.

His statement yesterday claimed that the chairman, Tan Sri Hadenan A Jalil, decided to adjourn the emergency meeting, citing “insufficient time” for all board members to be present.

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was said that Ooi and Tey wrote and complained to Hadenan they were denied the process natural justice on a deal involving the sale of a land with oil concession in Sumatera. During the Indonesian Presidential election Protasco management imposed a condition to the vendor for the public policy by Indonesia to favour the Malaysian plc.

Hadenan responded on the excuse of going with the management on the biased simplified solution to a problem which is a multilayered transaction and multinational.

The complain is more complicated than what meets the eye. Ooi made a report of alleged corrupt practices by Ir. Chong with MACC Putrajaya on 29 October 2014.

Protasco Bhd MD Dato’ Sri ir. Chong Ket Peng

As someone who is high placed within MACC, it is almost certain that by the time of the BoD meeting on 31 October Hadenan already been informed of the report made by Ooi. Yet, he still went with Ir. Chong’s game to have the EGM two days ahead of the Tey’s and Ooi’s sponsored EGM.

It is very unprofessional for Hadenan to do so.

However Hadenan in his wealth of experience as the Auditor General and as a corporate personality in some of the most prolific and strategic corporations are not being reflected in the decisions that he made here in Protasco.

NST story:

Tey fails bid to suspend Chong

1 NOVEMBER 2014 @ 12:29 AM

PETALING JAYA: Protasco Bhd non-executive director Tey Por Yee yesterday claimed that its board of directors refused to have managing director Datuk Seri Chong Ket Pen answer any of the allegations on a RM10 million personal financial gain.

The call to suspend Chong until disciplinary action can be taken was also not allowed to be tabled at the board’s meeting yesterday, Tey said.

Protasco had in September launched a legal suit against Tey, another non-executive director Ooi Kock Aun and PT Anglo Slavic Utama (PT ASU) to claim back US$22.1 million (RM72.49 million) it paid in its foiled attempt to buy a controlling stake in an oil and gas firm in Indonesia.

In return, Tey filed a derivative action early this week against six board members of RS Maha Niaga Sdn Bhd, including Chong, to recover RM10 million for Protasco. Tey also sought to remove Chong by calling for an extraordinary general meeting (EGM) on November 28.

In a statement yesterday, Tey said Protasco had brought in lawyers to the board meeting, who then objected to the resolution being tabled or put to vote.

Tey also said the EGM called by Protasco’s board two days earlier than the one by him is deliberately to “prevent shareholders from knowing the truth”.

Meanwhile, Protasco said its board had agreed to hold an EGM on November 26 to deliberate on the resolution to remove Tey and Ooi as its directors.

“A notice to call the EGM will be issued in due course and further announcement(s) on the matter will be made.”

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In fact there is probably a conflict. Hadenan should not be seen as taking sides when he should be impartial in the boardroom tussle. Especially now that there is a legal case brought by both parties against each other.

The Sun story:

Protasco’s Tey counter sues senior management

Posted on 29 October 2014 – 05:36am
Lee Weng Khuen
sunbiz@thesundaily.com

PETALING JAYA: One of the embattled directors of Protasco Bhd Tey Por Yee has responded to the suit filed against him by Protasco with a counter suit claiming failure by management of the company to exercise their authority for the benefit of the company.

Tey, suing in a representative capacity on behalf and for the benefit of Protasco, is alleging that Protasco’s senior management had made RM10 million in secret profits from the aborted PT Anglo Slavic Indonesia (PT ASI) deal and is suing to recover the said amount.

Protasco’s vice chairman and managing director Datuk Seri Chong Ket Pen, Edward Khoo Mong Wei, Lim Yew Ting, Low Kian Seng, Khor Hooi Ling, Kenny Chong Ther Nen, as well as Protasco and RS Maha Niaga Sdn Bhd are all named in the suit by Tey and Ooi.

Tey, speaking in the presence of his lawyer at a press conference yesterday, said that he had discovered evidence of a money trail where monies paid by Protasco for the proposed acquisition of PT ASI was flowed through two layers of companies before a RM10 million cheque was drawn and paid to benefit RS Maha Niaga Sdn Bhd’s account with United Overseas Bank (M) Bhd in early 2013.

Ooi Kock Aun, the other party being sued by Protasco was not present at the press conference and is not part of the suit filed by Tey though his company Kingdom Seeker Ventures Sdn Bhd (KSV).

According to Tey, PT Anglo Slavic Utama (PT ASU) vide its lawyers cited that the RM10 million was Chong’s financial gain from two contracts, which are related to the takeover of an oil deal and bitumen and coal trading with Indonesian companies.

Filings with the Companies Commission of Malaysia show that Khoo and Lim are the shareholders of RS Maha Niaga.

In a statement released later in the evening in response to Tey’s statement, Chong denied the allegation made by Tey and said he will be lodging a police report on the claims made by Tey.

Back in December 28, 2012, Protasco entered into an agreement to acquire some stake in PT Anglo Slavic Indonesia (PT ASI) from PT ASU, in a move to venture into the oil and gas business. However, the deal fell through last August when Protasco decided to terminate the deal.

Tey, who himself is sought to be removed by substantial shareholders in Protasco, meanwhile said he will call for an EGM at the end of November or early December to remove Chong.

Tey, who owns a 18% stake in Protasco through KSV, plans to present the evidence he has gathered against Chong to shareholders at the EGM.

“We’re (Tey and Ooi) are being made the scapegoat to cover this major breach of shareholders’ trust,” he told a media briefing here yesterday.

Tey pointed out that as soon as he discovered the evidence of money trail, he had called for an emergency board meeting on Monday to present the facts and evidence of the wrongdoing and ask for the board to take action.

The company’s chairman Tan Sri Hadenan Abdul Jalil however informed Tey vide a letter that the meeting would instead be held this Friday.

In a separate statement to rebut Tey’s claims, Protasco explained that the postponement of the meeting is in view of its importance to enable all board members to attend.

On Monday Protasco received notice from its shareholders, UOBM Nominees (Tempatan) Sdn Bhd and Tan Heng Kui who collectively hold a 10.51%, to call for an EGM to remove Tey and Ooi.

Tey and Ooi are currently being sued by Protasco for breach of fiduciary duties, involving a claim of US$27 million (RM88 million) in damages for fraud and conspiracy over the PT ASI takeover deal.

Share price of the construction and property development firm closed 4 sen lower to RM1.60 yesterday.

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Then again, there could be a perception issue when Hadenan is remains as Protasco Chairman when MACC investigation officers conduct their pry into the allegations as per in Ooi’s report.

What could very interesting is that Hadenan as the Chairman was part of the circular resolution in the deal to acquire the Indonesian parcel with the intention of taking Protasco Bhd. into oil and gas business. It was part of the deal when Tey and Ooi came and took substantial position in the company.

PT Anglo Slavic Indonesia, which Protasco Bhd. owns 63% holding and management control is reflected in the listed co's 2013 Annual Report

PT Anglo Slavic Indonesia, which Protasco Bhd. owns 63% holding and management control is reflected in the listed co’s 2013 Annual Report

No proper BoD meeting was held. What was more interesting, no EGM was held too for the listed company to make such a strategic departure on top of their existing business tracks.

It is a mystery that the former Auditor General and an experienced corporate man went along with Ir. Chong’s game. Too much at stake here, when all the mitigating factors are being weighted into public perception, which would spill over beyond Protasco Bhd.

Some of the BoD of Protasco Bhd; Tan Sri Hadenan A Jalil, Dato' Ir. Chong Ket Peng, Dato' Ibrahim Mohd. Noor and Larry Tey

Some of the key personalities amongst the BoD members with substantial shareholdings within Protasco Bhd; Tan Sri Hadenan A Jalil, Dato’ Ir. Chong Ket Peng, Dato’ Ibrahim Mohd. Nor and Larry Tey

The Malaysian corporate scene would be discoloured when the facts presented in the suit would itself undermine the perception if not the integrity itself of the personalities involved.

Right at the top is definitely Hadenan.

Hadenan is caught between the two hats of Protasco and MACC. A third, if the membership of BoD of Malaysia’s largest banking group, Maybank Berhad is included. Public perception would be gambled especially as the boardroom tussle will also turn into a bitter courtroom.

Published in: on November 15, 2014 at 22:00  Comments (14)