The Securities and Futures Commission has refused to allow listed country-club operator Essential Enterprises to pay special commissions and strike consultancy deals with key shareholders in New Media to smooth the takeover of the unlisted telemedia and Internet service provider.
Shareholders' documents released yesterday on Essential's $549.85 million bid for New Media revealed that the SFC had turned down Essential's application to issue five million new Essential shares to Jupiter, a company wholly owned by New Media director William Lam and his wife.
The payment was to compensate Mr Lam for introducing Essential to other key New Media shareholders.
In addition, Essential's consultancy agreements with New Media deputy chairman Robert Cheney and director William Au Yang have been rejected by the SFC.
Under the two-year agreements, Mr Cheney and Mr Au Yang were offered monthly salaries of $200,000, for consultancy service of not more than 10 hours a week.
Three-year options for five million new Essential shares at $1 each also formed part of the agreement terms.
