PRECISION plastic components manufacturer Fu Yu Corporation’s board of directors declined to appoint substantial shareholder Victor Lim as a director due to potential non-conformance to the “directors’ integrity requirements” set out by the Singapore Exchange (SGX).
Specifically, Fu Yu said that the board’s nominating committee (NC) relied on SGX’s listing manual rules 246(5)(a), which are to be read with the Securities and Futures Regulations 2018.
“The current NC remains willing and able to discharge their duties to perform the assessment of the current board candidates proposed by Lim,” the company said in a bourse filing on Friday (Jan 24).
Lim had earlier called for an extraordinary general meeting on Jan 9 to remove independent directors Royston Tan and Christopher Huang. He also called for the appointment of three other independent directors – Gilbert Rodrigues, Ralf Pilarczyk and Yang Zhenrong.
In response to queries by the Securities Investors Association (Singapore), or Sias, the company said that Lim has been a director of strategy at the company for the past four years, and that he indicated that he had a turnaround strategy.
“However, the NC does not hold the same view; the NC also notes that Lim’s justifications were verbal, and not written,” the company said.
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Fu Yu added that the board is open to engaging with Lim and has instructed its legal advisers to reach out to him for information and documents relating to the requisition.
The company reiterated that independent directors are not involved in the day-to-day running of the business of the group, and that it is “difficult to see” how replacing the directors would effectively improve the performance of the company and its share price.
It added that the board has not had disagreements with management. The company had earlier published its strategic direction with its corporate and business update on Nov 28, 2023.
“In the board’s view, the execution of these strategies will be necessary to drive the company’s financial turnaround, and pave the way for future growth,” the company said.
Furthermore, Fu Yu said that it is at the tail end of its internal re-tooling and transformation, which will provide a “strong business foundation to secure customers in new markets and improve operational efficiencies”.
“Already, the group has recorded increases in orders and higher interest to increase order volumes in recent months, partially driven by customers looking to stockpile inventory in response to an expected rise in US-China trade tensions,” the company said.
Fu Yu added that the company is in the initial stages of prototyping, design iterations and mould development for new clients it secured in FY2024.
The group’s unaudited FY2024 financial results are expected to be released at the end of February 2025, Fu Yu said.
Fu Yu shares closed flat at S$0.125 on Friday, before the bourse filing was made.
