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.
In its questions 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.
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.
The Business Times understands that Lim has been a director of strategy at Fu Yu since 2021, but was not on the company’s board.
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He has called for the appointment of Gilbert Rodrigues, Ralf Pilarczyk and Yang Zhenrong as IDs to replace them.
“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.
This comes after Fu Yu’s board had earlier rejected Lim’s bid for a board seat on Dec 26, 2024. Sias has asked the board’s nominating committee for its reasons for rejecting Lim’s request to join the board, as well as the justifications that he presented to join the board.
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.
Local fund management firm Pilgrim Partners Asia had earlier purchased a 29.8 per cent stake in Fu Yu from the company’s co-founders and placed it in a fund in January 2021.
Lim later became the fund’s sole shareholder on Nov 22, 2024, and opted to wind it down on Dec 11, 2024. He had also applied to join the company’s board, the company said in a clarification notice on Dec 19, 2024.
Shares of the company stood unchanged at S$0.127 as at 3.37pm on Thursday.
