SINGAPORE (Apr 18): Lim See Yen, a minority shareholder of Datapulse Technology, has sent a letter urging the board to “engage SGX actively” regarding several red flags involving two of the company’s former directors as well as an investment in Raffles Campus.

Datapulse’s current board revealed in an earlier filing on Mar 27 that the company had made a $2 million equity investment in Raffles Campus in 2004, accounting for 47% of the total equity investment of $4.2 million.

The deal was deemed an interested person transaction as Datapulse’s then independent non-executive director Ng Boon Yew was also a controlling shareholder of Raffles Campus.

Datapulse had acquired around 19 million new preference shares in Raffles Campus at approximately 10.5 cents apiece in 2004. This translated to Datapulse holding approximately 26.65% of the then total issued preference shares, while Ng held approximately 35.47%.

A year later, Raffles Campus undertook a further issuance of 104.6 million new preference shares at 1 cent each – a discount of more than 90% compared to the issuance in 2004.

Ng subscribed for 100 million new preference shares, while Datapulse did not subscribe for any.

As a result of this, Datapulse’s percentage of total preference shares issued was reduced to 10.8%, while Ng’s percentage of total preference shares issued was increased to approximately 71.2%.

Lim questioned the authenticity of this further issuance, asking why Datapulse did not participate in the issuance despite the massive discount.

Three months after this further issuance, Raffles Campus was sold for $7.5 million. Datapulse received $2.1 million, or 28% of the total consideration, even though it had earlier contributed to 47% of the total equity investment of $4.2 million.

Ng Bie Tjin @ Djuniarti Intan (Intan Ng), who is leading a group of dissenting shareholders to overthrow Datapulse’s current board, was then still serving as the company’s executive director and finance director.

She is the daughter of the company’s co-founder and former chairman, and was then a controlling shareholder of the company.

Ng Boon Yew and Intan Ng are two of the four directors that the dissenting faction is proposing to replace the current board.

See: Datapulse responds to Mak Yuen Teen

Lim also questioned if there were any inconsistencies between Intan Ng’s statutory filing with SGX on her resignation from the Datapulse board in 2014, and what actually happened.

Although Intan Ng had declared that she was resigning “to pursue other personal interests”, Datapulse revealed in March that she “may not have accurately disclosed the true reason for her departure from the company.”

The company said its statutory records showed that an apology letter was issued by Intan Ng to a fellow executive director, Ng Cheow Chye in August 2014, just three months before her resignation.

Datapulse said the apology letter highlighted that Intan Ng had “insufficient knowledge or misreading of financial records” and an “inability to maintain proper accounting records and lack of competence as a finance director” of the company.

“These are important and urgent matters that the board need to address immediately and openly for the benefits of all shareholders,” Lim writes. “The shareholders need to know the circumstances surround these red flags.”

Lim adds that shareholders deserve to know whether there have been breaches, as well as SGX’s position on the discrepancies, and if there is any rectification action to be taken.

In response, Datapulse says issues concerning the company’s investment in Raffles Campus as well as the resignation of Intan Ng will be examined by independent reviewer Lee & Lee.

See: Datapulse appoints Lee & Lee as new independent reviewer after SGX red-flags possible conflict of interest

The review is expected to be completed within two months from the appointment of the independent reviewer.

The board adds that it will review the content of the letter and may, if deemed appropriate, address the salient issues by way of an announcement in due course or during the EGM scheduled for Apr 20.

See: Datapulse Tech's two dissenting factions will come head-to-head in April 20 EGM

As at 3.46pm, shares of Datapulse are trading half a cent lower at 34.5 cents.