Two directors ousted at Stone Master EGM

KUALA LUMPUR: Two board members of Practice Note 17 company Stone Master Corp Bhd who were removed at an EGM yesterday said the court will ultimately decide on the validity of the meeting.
The EGM, which was called by Stone Master’s executive director and single largest shareholder Datuk Karen Lee Fong Yin, was successfully​ convened even as the two ousted board members were questioning its validity, alleging that proxy forms had been tampered with.
All resolutions, including the removal of managing director Datuk Koh Mui Tee and executive director Datuk Lee Hwa Cheng, were passed at the EGM, except for one where a director withdrew himself from being elected. Seven new directors were appointed to Stone Master’s board.
The door to the room where the EGM was held was guarded tightly and no media was allowed to enter. Subsequently, reporters and photographers were not allowed near the meeting room.
Fong Yin, who had evaded the media earlier, later called a press conference to announce the outcome of the EGM. About 91.48% of the shareholders voted for the appointments of Low Eng Tack and Datuk Ng Boon Siong as directors respectively to replace Koh and Hwa Cheng. The EGM was chaired by Low.
The new board said it will take over the marble and granite products company with immediate effect. However, there was no announcement filed with Bursa Malaysia on the outcome of the EGM.
Fong Yin, who holds a 22.29% stake in Stone Master, said she had lost confidence in the management following the Securities Commission’s suit against former deputy managing director Datin Chan Chui Mei for allegedly causing wrongful loss to the company.
“We’re happy that the EGM ran smoothly. We will seek legal consultation (on the legal suits filed by Koh),” Ng told reporters.
Fong Yin said she had obtained a court order to convene the EGM, and that the proxy forms were not tampered with, as opposed to what was alleged by Koh.
Koh reiterated that the EGM was considered invalid, convened with the purpose of “taking over the company by the back door”.
“One cannot simply call for an EGM and replace the whole board except herself. This is hijacking and is unlawful,” he told reporters.
Koh claimed that Hwa Cheng and himself remain legitimate directors in the company and that nothing has changed, with operations as usual.
“Let’s go to court and have this settled,” said Koh.
He added that the fate of Stone Master is now in the hands of creditors who can anytime apply to wind up the company, as it is no longer liquid. Stone Master, had been incurring losses since 2008 but returned to the black in the first quarter ended Dec 31, 2016, registering a net profit of RM151,000.
Interestingly, just days before the EGM, Stone Master on May 27 filed a suit to seek RM1.38 billion from Fong Yin and second largest shareholder Datuk Eii Ching Siew for breach of fiduciary duties to the company.
Separately, Stone Master announced yesterday that it is being sued by private equity investment firm Starfield Capital Sdn Bhd for RM18 million. The suit, the board said, is expected to have “material financial and operational impact” on Stone Master.