Photo: The Edge Singapore
The to-and-fro between MC Payment, helmed by CEO Anthony Koh, and major shareholder Ching Chiat Kwong (seen together in happier times), is likely to continue. Ching is better known as executive chairman and major shareholder of Oxley Holdings. He is also the largest, and controlling shareholder of MC Payment, with a 27% stake.
Following a statement by Ching on June 9, which revealed that MC Payment’s board had entered into a non-binding termsheet to acquire a stake in NGSC, Koh has riposted. In replies to queries from the Singapore Exchange on June 10, and again on June 14, Koh has reiterated that MC Payment “did not enter, and has not entered, into any binding term sheets or agreements in relation to any acquisition of NGSC”.
On June 10, Ching said he found out, after studying MC Payment’s board meeting minutes which took place on April 30, two days after Shawn Ching and Harry Ng were not re-elected to the board, that a resolution, authorising Koh to enter into a term sheet on behalf of the Company for the proposed acquisition of shares NGSC, was passed.
According to Ching’s statement, MC Payment had planned to purchase at least a 51% stake in NGSC. The agreed purchase price is based on $9.6 million for 100% of NGSC, and this would be satisfied through issuing new MC Payment shares to NGSC.
On May 25, NGSC - which was on the SGX’s watchlist - in reply to the SGX’s instruction to delist, announced that its board is considering the viability of undertaking an exit offer by way of a court approved selective capital reduction. As at Mar 31, 2021, NGSC had $10.1 million in total equity, after accounting for some $132.5 million in accumulated losses. Whether an infusion of capital from MC Payment would boost equity is anyone’s guess.
Subsequently, on May 28, NGSC announced that it was notified an independent director, Mahtani Bhagwandas attended an interview conducted by the Commercial Affairs Department in relation to an investigation involving certain private companies unrelated to NGSC.
“Aside from the potential dilution that would be caused to the existing shareholders’ stake in the Company by the issuance and allotment of new shares, it is not apparent to me how the transaction to acquire shares in NGSC would be in the best interests of the Company,” Ching had said on June 10, referring to the some $4.9 million purchase price for NGSC to be satisfied by these new shares. MC Payment is trading at 32 cents.
On Feb 18 this year, Ching fully redeemed bonds and associated interest payable by MC Payment in return for shares valued at $10 million. In 2019 and 2020, Ching provided MC Payment with unsecured loans totaling $559,450. In addition, Ching has undertaken to provide adequate funds to MC Payment to enable it to continue its operations as a going concern and to enable it to pay its liabilities as and when they fall due 12 months from April 6, 2021.
In his riposte on June 14, Koh says Ching’s issues started when Shawn Ching and Harry Ng were not re-elected to the board on April 28. According to Koh, Ching wrote to MC Payment on April 29, to request that the board invite Ching, Shawn Ching, and Harry Ng to the board.
“The Company took steps to consider Mr Ching’s letter, but before they could have a proper consideration, Mr Ching on May 4, 2021 caused to be deposited with the Company a requisition to appoint himself, his son Mr Shawn Ching, Mr Harry Ng, and two others as directors of the Company (First Requisition Notice),” Koh says in an announcement on June 14.
MC Payment has convened an EGM to be held on June 30. “The Company will be issuing a circular to its shareholders in due course on the First Requisition Notice as well as the Company’s comments on the same. The Company encourages its shareholders to read the First Requisition Notice and the Company’s comments closely ahead of the June 30, 2021 EGM,” Koh says in his statement.
Observers of the saga have said it is unusual to get a resolution to sign a term sheet and wondered why a resolution was needed to grant such powers. A previous investor in MC Payment, when it was a private company, divested a few years ago following a corporate governance issue. According to the investor, this involved not informing a convertible bondholder, who was a director of MC Payment, of the proposed RTO.