SINGAPORE (June 29): Mirzan Bin Mahathir, chairman of SBI Offshore, was voted out by shareholders at the company’s annual general meeting earlier today.

According to the company in a filing to the stock exchange, 70.05% of the valid votes were against his reappointment, versus just 29.95% in favour.

Mirzan became a substantial shareholder of SBI Offshore back in Sept 2014 after buying 10.8% of the company via a private placement at 26.05 cents per share.

He is the son of former Malaysian prime minister Dr Mahathir Mohamad.

At the AGM, another director, James Kho Chung Wah, was re-elected. 

Besides voting out Mirzan, shareholders shot down other a couple of other resolutions too. 

For example, 66.43% refused to approve directors’ fees of $120,000 for the FY ending Dec 31 2020 to be paid on a quarterly basis in arrears. 

In addition, they would not allow the company the authority to issue shares, neither is the company allowed to issue shares as award for performance.

On June 12, SGX RegCo said is looking into SBI Offshore for potential listing rule breaches as well as potential contravention of directors’ fiduciary duties, following the release of a special audit by RSM Corporate Advisory.

The special audit was ordered by SGX RegCo back in December 2018, to probe the sale of a factory in China sold by SBI Offshore at just RMB18 million – a significant discount off its book value of RMB38 and 40 million. 

The special audit, released by RSM on June 12, concluded that SBI Offshore did undertake an “adequate and reasonable” process to try and sell that factory. The transacted price of RMB 18 million represented the best offer they received during the period.

However, based on the RSM special audit, several other issues related to the same factory has arisen.

For one, when SBI Offshore bought the factory, the acquisition agreement did not contain sufficient details of the assets to be acquired.

No valuation was conducted prior to the execution of the acquisition agreement to assess and support the purchase consideration of RMB32 million.

Prior to entering into the acquisition agreement for the purchase of the factory, the company had incurred RMB8.19 million for the construction and renovation of the factory even though SBI Offshore was intending to acquire a completed factory. 

Besides the purchase price of RMB32 million, SBI Offshore incurred capital expenditure of about RMB15 million up till 2013 for this factory. 

“The factory was eventually underutilized and accumulated losses of more than RMB 47 million for the period up to 31 December 2017,” said SGX RegCo.

Citing findings from the special audit, SGX RegCo will now commence detailed probes on the company.