Sias Asks Fu Yu Corporation’s Board to Substantiate Claim by Largest Shareholder Victor Lim
The Securities Investors Association (Singapore), or Sias, has asked precision plastics manufacturer Fu Yu Corporation’s board to substantiate the claim by the largest shareholder Victor Lim that the company’s independent directors (IDs) should be removed due to company performance.
Questions to the Board
In its questions to Fu Yu’s board on Thursday (Jan 16), the association noted that IDs are not typically involved with managing the company.
It further asked if the board has actively engaged with Lim on Fu Yu’s strategic direction, as well as whether there have been disagreements between the board and the company’s management of its strategy.
Independent Directors’ Response
Fu Yu’s IDs Christopher Huang and Royston Tan had expressed surprise that Lim, who holds a 29.45 per cent stake in the company, requisitioned for an extraordinary general meeting (EGM) on Jan 9 to have them removed.
Huang also said that the IDs could not “in good conscience, say that it is in the best interest (of the company) for him to be admitted as an executive director”, although he did not give any specific reasons for why the board declined his bid.
Lim’s Proposal
He has called for the appointment of Gilbert Rodrigues, Ralf Pilarczyk, and Yang Zhenrong as IDs to replace them.
Sias’ Concerns
“In the event the IDs are removed at the proposed EGM, who will review the suitability of the ID candidates proposed by Mr Lim, as there will be no nominating committee to assess the board candidates proposed by Mr Lim?” Sias asked.
Tan is currently the chairman of the board’s nominating committee.
Financial Performance
Sias asked for the board’s opinion on whether the company’s recent upturn in financial performance will continue.
In the nine months leading up to Sep 30, 2024, Fu Yu’s revenue rose 55.2 per cent to S$162 million, while its net loss narrowed to S$1.9 million, from S$5.8 million in the prior year.
Conclusion
The Securities Investors Association (Singapore) has asked Fu Yu Corporation’s board to substantiate the claim by the largest shareholder Victor Lim that the company’s independent directors (IDs) should be removed due to company performance. Sias has raised several questions to the board, including whether the board has actively engaged with Lim on Fu Yu’s strategic direction and whether there have been disagreements between the board and the company’s management of its strategy.
FAQs
Q: Why did Victor Lim request for an extraordinary general meeting (EGM) to have the independent directors removed?
A: Lim has claimed that the independent directors should be removed due to company performance.
Q: Who are the independent directors that Lim wants to replace?
A: Lim has proposed the appointment of Gilbert Rodrigues, Ralf Pilarczyk, and Yang Zhenrong as independent directors.
Q: What is the current financial performance of Fu Yu Corporation?
A: In the nine months leading up to Sep 30, 2024, Fu Yu’s revenue rose 55.2 per cent to S$162 million, while its net loss narrowed to S$1.9 million, from S$5.8 million in the prior year.
