KUALA LUMPUR, Oct 10 — A UEM Sunrise board member resigned just days after a proposed merger with Eco World Group Berhad became publicly known and was the second to do so.

Subimal Sen Gupta Sen, an independent director, was the first to tender his resignation. A notice filed on October 7 with Bursa Malaysia said Subimal quit for personal reasons.

Yesterday Malay Mail reported managing director and chief executive Anwar Syahrin Abdul Ajib announcing his exit from the government-linked property company. UEM Sunrise filed the notice with Bursa Malaysia on Friday evening.

The firm said in the notice it would announce the resignation “in due course”.

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The abrupt exit of its board members have fuelled talks of trouble at UEM Sunrise. Various news reports suggest there is internal opposition to the merger proposition. 

EcoWorld said in a filing to Bursa Malaysia that it received the proposal from UEM Group, UEM Sunrise’s main shareholder, on Monday.

But the proposition has become the epicentre of yet another controversy involving state-linked firms under Perikatan Nasional rule, as opponents are reading it as another attempt to bail out a beleaguered company.

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Critics of the Perikatan Nasional government have taken to social media to accuse UEM Group, UEM Sunrise’s parent company, of cronyism, claiming the deal favoured the owners of Eco World. 

Sovereign wealth fund Khazanah Nasional Berhad holds a controlling stake in UEM Sunrise via UEM Group, at 66 per cent.

The proposed merger will be carried out through share and warrant swap. Upon completion, UEM Group will remain the single largest shareholder of the merged entity with 43 per cent. 

UEM Group said the consolidation exercise would harness the strengths and capabilities of UEM Sunrise and EcoWorld, as subdued macro-economic conditions made worse by the outbreak are forcing property players to pool resources to survive.

But critics found little merit for the merger. Among reasons given were Eco World’s heavy debt.