All not quite as Seamless as it would seem ...
There is disarray among the board at Seamless Green China (Holdings), a GEM board stock with a market capitalisation of HK$222.34 million.
The company makes synthetic sapphire crystals for watch mechanisms, provides energy-efficient street lamps on the mainland and trades liquor. It is also moving, seamlessly no doubt, into the production of bio-diesel and earlier this year signed an MOU with a Shenzhen company to plant and process jatropha curca, which is being hailed as a source of the fuel. Seamless made a loss of HK$7.3 million for the half year ending June 30.
The chairman of Seamless was until recently Andrew Lam Ping-cheung. He's a former ICAC prosecutor and now runs his own law firm. He was jailed for six years for perverting the course of justice, but released after two years after his conviction was quashed on appeal. He joined Seamless as chairman in November last year and became executive director in November last year. But earlier this month he announced a hostile takeover of the company with backing from Emperor Capital, which is controlled by Albert Yeung Sau-shing. The offer was at HK$0.75 and will total about HK$160 million. The offer is to be financed by a loan of HK$200 million provided equally by Emperor Securities, Chung Nam Securities, Get Nice Securities and Freeman Securities.
One of the curiosities of the offer is that it is priced at 40.9 per cent below what the stock was trading at before it was suspended on August 3. It is still 25 per cent below yesterday's closing price of HK$1.01 after falling 12 per cent when it resumed trading. However, the document says the offer price is at an 82.51 per cent premium to the audited consolidated net assets of about HK$0.41 as of December 31 last year.
Lam says he is making the offer so that the company can operate without being influenced by a 'shadow director', the existence of which is strongly denied by the company. Lam also says he wants to improve governance at the company. The company says this is the first time Lam has shown any interest in governance, and he rarely showed up for board meetings. In a statement, the company notes that Lam, during his period as chairman, 'did not, in the board's view, demonstrate capability in running a listed company and developing a profitable business'. The board said shareholders should reject the offer, but it will appoint an independent financial adviser to assess it. On the face of it, it looks like an offer shareholders may be able to refuse.