SINGAPORE (Jan 3): Catalist-listed Magnus Energy group has been hit with a notice of compliance (NOC) from the Singapore Exchange Regulation (SGX RegCo), following a recent transaction that might have breached listing rules.
On Friday, the bourse highlighted that Magnus Energy had sold its 50% indirect stake in Mid-continent Environmental Protection (MEPWM) to its own existing director, Chong Yen Yee, for RM1 (33 cents).
According to the company, the disposal of its stake in MEPWM was part of the winding down of its oil and gas equipment supplies and services segment.
The transfer of the stake to Chong would also reportedly enable the group to exit from its loss-making associate and to facilitate the statutory process to strike off its respective associate in Malaysia.
As the disposal involves negative relative figures under the Catalist rules, SGX RegCo should have been consulted by the group on the applicability of Chapter 10 of the Catalist rules - which requires a company to consult the exchange on such transactions, and adds that such transactions are at the discretion of the exchange.
“[Magnus Energy] had proceeded to complete the disposal despite being informed by the sponsor of the need to consult the exchange for the disposal,” says SGX RegCo.
“SGX RegCo requires the company to put on hold all corporate transactions, including but not limited to acquisitions, disposals, fund raising and restructuring, until such time the board is fully reconstituted,” added the regulation.
SGX RegCo also notes that Magnus Energy’s board at the relevant time comprised Seet Chor Hoon and Lee Chong Ping, with the latter proposed to be re-elected as a director at the upcoming extraordinary general meeting (EGM) slated to be held on Jan 9.
Under the Companies Act, the EGM is required for the appointment and removal of directors by requisitioning shareholders, as well as for the appointment of new directors by the group.
The EGM comes after a group of Magnus Energy’s minority shareholders had shot down all 10 resolutions put forward during the group’s recent annual general meeting (AGM) held on Oct 30.
The minority shareholders had also ousted the group’s chairman and two directors, and blocked the reappointment of independent auditor Moore Stephens. Mandates to issue shares for either fund raising purposes or payment of the group director's fees were also halted.
See: Penny stock-linked Magnus Energy's past transactions under spotlight as dissenting minorities call for EGM
Prior to suspension on Aug 23, shares in Magnus Energy were trading at 0.1 Singapore cent.