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SCMP Reporter

Regent Pacific sent an already stormy special general meeting yesterday into stunned disbelief with the revelation that Pioneer Industries International's major income-earner - a stake in Bangkok Bank - might not be legally recognised.

 More intriguing was the claim the information had been conveyed by Pioneer chairman Anthony Gaw to Regent privately, without any public announcement.

  The telephone conversation on July 26, in which Mr Gaw related the news to Regent, was taped and a transcript sent to the relevant securities authorities for investigation, the meeting was told.

  An extraordinary general meeting requisitioned by Regent - 20 per cent holder of Pioneer - was convened yesterday.

  The two motions voted on included the introduction of 13 new directors and that directors be requested to narrow the discount between the share price and the net asset value of Pioneer.

  Both motions were defeated as 67 per cent of the 273 million votes cast went against them.

  In explaining the motions, Regent cast doubt over the ability of the present management, pointing to 'inappropriate behaviour of corporate governance'.

  Regent cited a telephone conversation between Mr Gaw and Peter Everington, chairman of Regent, in which Mr Gaw disclosed that Pioneer's holding in the shares of Bangkok Bank did not have the approval of Thailand's investment board. As the stake is held through a Thai company, any foreign company controlling a Thai company has to obtain blessing from the board.

  Regent suspected that the information was released selectively to a few shareholders. More interestingly, the Thai subsidiary which holds the shares, Mandalay Pioneer (Siam), was referred to in the annual report as 100 per cent-owned by Pioneer.

  However, Regent's own search in Thailand revealed that seven individuals owned Mandalay, of which five were Gaw family members and the other two were Thai nationals.

  Kenneth Gaw, executive director of Pioneer and chairman of yesterday's meeting, did not comment on the legality and ownership of the Bangkok Bank shares, saying that the conversation was between Mr Gaw and Regent.

  The company sent a handwritten fax to Regent on August 22 stating that: 'The board of directors denied making any statement regarding their Bangkok Bank shareholding to Regent.'   It added: 'Any conversations between individuals do not represent the views of Pioneer and its board.'   Regent claimed its ability to trade its Pioneer shares has since been inhibited. If other attempts to resolve the issues Regent highlighted in the meeting failed, Regent would resort to a judicial review in Bermuda, based on the argument that minority shareholders' rights have been oppressed.

  Jamie Gibson of Regent Pacific Corporate Finance said: 'That is price-sensitive information and we cannot deal in our shares because of that.'   The review, if accepted by court, may result in a court-appointed administrator taking control of the company.

  Subsequent to receiving the supposedly 'price-sensitive' information, Regent identified that a package of 7.8 million shares were sold on August 12.

  The buyer of the shares was unknown. Monitor, Markets Page 12 



Revelations of possible share illegality stun Pioneer meeting