SINGAPORE – Raffles Education Corp on Monday received a notice of requisition from substantial shareholder Oei Hong Leong, who is seeking once again to remove company founder Chew Hua Seng as chairman and chief executive officer.
Mr Oei and his firm, Oei Hong Leong Art Museum, sent the notice requesting that the mainboard-listed private education provider convene an extraordinary general meeting (EGM) and table six resolutions for shareholders’ approval.
Mr Oei held 12.2 per cent of Raffles Education as at May 31, 2020, while Mr Chew owned 29.4 per cent, according to Shareinvestor data.
One of the resolutions is for the removal of Mr Chew, including terminating his employment with Raffles Education, from all his appointments with the company, its subsidiaries and associates.
Mr Oei is also seeking to appoint one of the independent directors as a non-executive chairman, or to have the board of directors search for a suitable candidate.
In connection with the placement of 95 million new shares issued and allotted on Oct 10, 2017, at $0.30 apiece, Mr Oei wants Raffles Education to disclose the identities of the placees and the number of shares placed to each of them. The placement had diluted the stake that he and his firm held to 12.88 per cent, from 14.04 per cent.
These three resolutions are substantially similar to those in Mr Oei’s previous EGM requisition notice sent on Oct 12, 2017, when he questioned that same placement. He subsequently withdrew that notice in return for an alleged promise by the CEO to procure a buyer for his Raffles Education shares, based on a handwritten agreement.
According to Monday’s notice, Mr Oei is also hoping that an independent special auditor will be appointed to conduct a special audit on the circumstances surrounding that 2017 placement and a rights issue in April 2018 that issued some 318.2 million rights shares at $0.14 each.
The other two resolutions are to appoint an independent special auditor to review the circumstances of all loans extended by the CEO to the company or its subsidiaries and the repayment thereof, as well as to review the circumstances surrounding the handwritten “confidential agreement” dated Oct 16, 2017.
The two businessmen had signed the handwritten agreement for Mr Chew to procure a buyer for the Raffles Education shares held by Mr Oei at $0.44 per share, which was about 45 per cent higher than the stock’s trading price at the time.
Mr Oei also wants the independent special auditor to investigate whether there were any regulatory compliance, corporate governance and disclosure issues arising from the handwritten agreement, including whether Raffles Education had failed to announce materially price-sensitive information.
The billionaire had relied on this handwritten note to sue Mr Chew for allegedly reneging on his promise to get a buyer for his shares. In February this year, the High Court dismissed the lawsuit, as the judge found that the agreement – which involved a discussion lasting less than two minutes – was not meant to be legally binding.
The Business Times understands that the Court of Appeal last Friday dismissed Mr Oei’s appeal against the judgment.
In its bourse filing on Monday night, the company said it is taking legal advice on the contents of the requisition notice.