The obvious answer is to appoint a new management team. But to back track a bit, on the afternoon of June 30 — after the results of Catalist-listed MC Payment’s EGM was known to shareholders — a local broker messaged: “It’s a non-event. But the events leading up to and including the EGM were so bizarre it was comical”.
Some market observers likened the tussle to a Korean drama. Others said it was akin to a Shakespearean tragedy like Othello. The story tells the tale of Othello, a Moorish general in the Venetian army charged with leading Venice on the eve of a war for the control of Cyprus. Iago is Othello’s jealous and bitter ensign, who goads his general to jealousy and anger till he kills his wife in a fit of rage.
At MC Payment, there was certainly a protagonist — the affable, almost humble founder and CEO Anthony Koh. An Iago-type character emerged, following a placement in March this year. The understanding is that Iago’s vehicle was NGSC. The latter was on the Singapore Exchange’s watchlist, the stock was suspended and the SGX had instructed the company to delist. To monetise NGSC, Iago hatched a plan to get MC Payment to pay for a 51% stake in NGSC using MC Payment shares which are trading on SGX-Catalist.
The first step to this plan was to remove major shareholder Ching Chiat Kwong’s representatives — his son Shawn Ching and Harry Ng — from the board. The elder Ching holds 27.06% of MC Payment, and the NGSC deal would dilute him significantly.
In statements released to the media, Ching said he wrote to MC Payment on June 2 with details of how shareholders of the company were asked to sign blank proxy forms ahead of the AGM on April 28. The proxy forms were subsequently filled up without the shareholders’ knowledge to indicate votes in favour of resolutions one, three, five to nine, but against resolutions two and four — that is, against the re-election of Harry Ng and Shawn Ching.
Two days after Shawn Ching and Ng were removed from the board on April 30, a directors’ resolution was passed authorising CEO Koh to enter into a term sheet on behalf of the Company for the proposed acquisition of shares in NGSC. The term sheet says that the vendors of NGSC would sell at least 51% of their respective equity interests in NGSC along with any other existing shareholder of the company, via the terms of the general offer to be made by the purchaser, MC Payment. The purchase price agreed for 100% of NGSC would have been $9.6 million.
If MC Payment had acquired 51% of NGSC, it would have had to make a general offer for all the shares in NGSC.
Ching found out about the term sheet and the likelihood of being diluted only when he exercised his shareholder’s rights of asking for the board meeting minutes. He requisitioned for the EGM to vote in Harry Ng, Shawn Ching, Johnny Chee and Henry Tan, with Chee and Tan as independent directors and to remove Anthony Koh, Albert Cheok, Lilian Koh, David Ong and Kim Moon Soo.
Subsequently, the company announced an EGM to be held on June 30, for shareholders to vote in the new directors, and an EGM on July 30 to remove Koh, Cheok, Lilian Koh, Ong and Kim. As it turned out, Koh, Cheok, Lilian Koh, Ong and Kim resigned from the board on June 30, while Koh will resign as CEO on Dec 31 and Kim will step down as chief operating officer on Sept 30.
From June 30, MC Payment’s board comprises Kesavan Nair, Johnny Chee and Henry Tan as independent directors, and Harry Ng, Shawn Ching and controlling shareholder Ching Chiat Kwong as non-independent directors. The elder Ching is likely to be the new chairman of the board.
Prior to the EGM held on June 30, both the company and Ching were issuing statements, with Koh and chairman Cheok on the one hand, and Ching on the other.
Since Ching issued his first statement on June 16, there were many twists and turns. One of the strangest is a circular issued by MC Payment stating that the nominating committee did not find the directors Ching put forward qualified while the sponsor, in the same document found them qualified.
With the immediate battle for control over, the next question is who will run MC Payment? Market observers say that the Chings have already got a CEO, chief operating officer and chief technology officer ready to hit the road running. A broader roadmap and strategy is likely to be articulated at a later date. Among the changes is a likely name change to something more appropriate and appealing for Generation Z.
MC Payment has an integrated platform servicing merchants in the retail, transportation and food and beverage industries. It also holds a payment institution licence in Singapore, and is regulated by the Monetary Authority of Singapore under the Payment Services Act 2019. In addition, the company holds payment licences in Malaysia, Indonesia and Thailand. Digital payments in Asean expected to triple to US$1.5 trillion ($2 trillion) by 2030.
Othello has some other characters. Among them is Cassio: A young, brilliant soldier whom Iago was jealous of and who was appointed Othello’s successor after the latter killed himself. Another character is Brabantio, Othello’s father-in-law who is full of his own self-importance. Meanwhile, the Duke of Venice also lurked in the background, controlling the purse strings.
Will we see more characters emerge in this evolving saga? Only time will tell.