Company dissenters back down

PUBLISHED : Saturday, 08 December, 2001, 12:00am
UPDATED : Saturday, 08 December, 2001, 12:00am

Dissenting minority investors in Shun Cheong Holdings backed down from battling the incumbent management for control of the company in a dispute triggered by a share placement earlier this year.

Former managing director George Kwok Shun-on, who led the dissenting shareholders, did not attend yesterday's annual and special general meetings.

Mr Kwok had proposed to revoke the authority of the board to issue new shares worth up to 20 per cent of the existing share capital.

The dissenting shareholders had also planned to seek the election of new directors, but all resolutions were passed in favour of the incumbent directors at yesterday's meetings.

The dispute was triggered by Shun Cheong's planned placement of new shares worth almost 19.4 per cent of the company's existing share capital. Mr Kwok, who holds a 12.61 per cent stake, stopped the placement in July through legal action.

Shun Cheong then launched a similar placement - equivalent to 19.92 per cent of the existing share capital - in September which Mr Kwok again tried to stop. The courts ruled in favour of the company and the placement was completed.

Mr Kwok feared the goal of the placement was to dilute his holding in Shun Cheong.

Shun Cheong chairman James Wong Sai-wing said the placement was necessary as the company needed to raise funds quickly amid the downturn in the construction sector.