Pioneer Industries International, a company under 'attack' by Regent Pacific Group, says Regent had tried to solicit company business for its corporate finance subsidiary through its influence as a shareholder. In a letter issued to all shareholders, Pioneer disclosed that shortly after acquiring Pioneer shares in November last year, Regent offered to act as financial advisers to Pioneer through Regent Pacific Corporate Advisory. Pioneer's letter was issued in response to a requisition notice served by Regent to convene a special general meeting on September 10. Regent is an aggressive management house known to raid under-performing funds or companies. Regent's offer was made, the letter claimed, 'in the hope of receiving advisory fees and benefits including options to subscribe for shares in the company at a low price'. A letter dated December 6, 1995 sent by Regent Pacific Corporate Advisory to the chairman and managing director of Pioneer, Anthony Teong Chan Gaw, set out the terms of the offer, which was declined. Regent's letter stated: 'We would like to tender hereby our corporate advisory services to Pioneer with a view to enhancing the company's value and improving the share price performance vis-a-vis its net asset value.' Regent's proposed compensation would have included a US$150,000 initial flat fee paid once the contract was signed, a US$25,000 monthly retainer and a success fee of three per cent of any increase in the market capitalisation. Pioneer argued that as Regent manages outside funds, it was using 'other people's money for which management fees are already charged to solicit advisory business for the benefit of another member of the Regent Pacific Group'. The shareholders' meeting will move two motions. One proposes to introduce 13 new directors to Pioneer's board and the other would direct the board to narrow the discrepancy between the net asset value and the share price of the company. Pioneer's management considers the move hostile and has urged shareholders to vote against the resolutions. 'Shareholders who want to liquidate or destroy the company are not welcome and they should sell their shares and get out,' the chairman said in the letter.
