KUALA LUMPUR, Nov 20 ― Conspiracy to defraud, secret profits, hidden interests, bribery, illegal financial gain and a group of “Indonesian/foreign entities”: these are the accusations being hurled in a boardroom fight at Main Board-listed Protasco Bhd.
Next week, Protasco's shareholders will have to weigh these allegations and decide who they can trust, at two separate extraordinary general meetings (EGM) called by the two rival factions.
This battle unfolded after a deal fell apart in August for the engineering, property and construction company to get into the oil and gas business. In September, Protasco sued directors Tey Por Yee and Ooi Kock Aun for USD27 million (RM90.5 million) and other damages.
The company alleged they conspired to defraud the company and were making “secret profits” by hiding their beneficial interests in the deal. Protasco's group managing director Datuk Sri Chong Ket Pen then requisitioned an EGM to remove Tey and Ooi as directors.
In turn, Tey requisitioned an EGM of his own to remove Chong. Tey also counter-attacked with his own suit, accusing Chong of bribery, corruption and making an illegal financial gain of RM10 million through a group of “Indonesian/foreign entities”.
This is a desperate manoeuvre to confuse Protasco's shareholders and distract him from his job of running the company that he helped found in 1991, Chong said.
“What we uncovered since August is quite shocking. We have found false documents, fraud, forged signatures and fake registered offices. This is why we are suing Tey and Ooi,” he said.
“We're an engineering company and we are all about process and procedure. Everything we do here is by the book,” said Chong who is also executive vice chairman.
Chong is one of Protasco's two founders who left the Public Works Department in 1991 to start the company together with RM100,000 in capital and six staff.
In 1997, when the Asian Financial Crisis struck, Protasco had grown to 600 staff. By making pay cuts across the board, no one was retrenched, a move which left the company in a good position to grab projects when the government began its pump-priming programme to revive the Malaysian economy.
Since it was listed in 2003, Protasco has grown further to 1,800 in staff size, with an unbroken profit record and an average of 8 to 10 sen in dividends paid every year.
This is what Chong is determined to focus on amid the flurries of calls from shareholders distressed by the allegations they received in their letterboxes.
“My sole objective is and always has been to protect the interest of Protasco and its shareholders,” he said.
The company aims to grow between 15 and 20 per cent in profit every year, and, more ambitiously, to join Bursa Malaysia's billion ringgit market capitalisation club in five years' time. Protasco's market capitalisation is currently RM549 million.
A chunk of the company's growth has come from its expansion into property development. Its De Centrum project in Kajang has an estimated gross development value of RM10 billion and will be developed over the next 10 years.
The company's order book has grown to more than RM700 million since he took on a full-time executive role in 2013, from less than RM100 million before.
Chong is likely to rely on this track record to persuade other shareholders at the EGM set for November 26, that newcomers Tey and Ooi Kock Aun should be removed as directors. In turn, Tey is expected try to persuade shareholders that his allegations against Chong are true at the EGM on November 28.
Tey had apparently brought a deal to Protasco in 2012 to invest in a working oilfield in Aceh. Protasco agreed to acquire a stake in PT Anglo Slavic Indonesia (PT ASI) which indirectly owned the oilfield.
The deal was renegotiated in 2014, then terminated by Protasco in August 2014. Protasco then sued Tey and Ooi in September for the return of the USD27 million paid to buy the stake in PT ASI and a shareholders' advance. It has also made police reports against Tey.
In turn, Tey through his vehicle Kingdom Seekers Ventures Sdn Bhd sued Chong, accusing him of siphoning off RM10 million through a group of “Indonesian/foreign entities”.
Last week, Chong filed his defence to the suit, denying Tey's claims. He said he had made a personal loan of RM20 million to Tey, of which RM10 million had been repaid. Chong claimed this RM10 million repayment is what Tey alleged is the illegal financial gain.
According to Chong, these entities have made numrous transactions in shares of listed companies linked to Tey.
“In his desperation to divert attention away from Protasco's suit, Tey himself has told the whole world that these companies are linked together. These entities are all linked to the listed companies that Tey owns shares in or is associated with,” said Chong at a press conference last week.
The companies were PN17 company Hytex Integrated Bhd, Wintoni Group Bhd (formerly Winsun Technologies Bhd), Asdion Bhd and Tey's own flagship Nexgram Holdings Bhd (formerly Nextnation Communication Bhd.
