Pioneer Global Group managing director Kenneth Gaw defended his company against allegations it ignored minority shareholder rights in a connected transaction last year and said that the directors' eye-catching salaries would be cut back.
The company, then known as Pioneer Industries Holding, attracted unfavourable publicity last November when it announced a plan to sell some of its assets to a consortium led by the Gaw family at a steep discount to market value.
Promise City - a company owned by family trusts related to the Gaw's and the family of Koo Yik-chun - paid HK$552 million for assets with a market value of HK$1.82 billion and an intrinsic value of HK$821 million after tax and mortgage liabilities.
Mr Gaw said the 32.7 per cent discount to the intrinsic value was required to make the deal worthwhile and to account for the risk involved.
He cited a loss the Gaw family made with the fall in the price of Bangkok Bank shares - in which Pioneer held a 1.85 per cent stake with a market value of HK$327.9 million in the portfolio of assets - from about 52 baht at the time the transaction was announced to close at 30.25 baht last week.
'Of course you think I got a big discount at that time, but there is also risk,' Mr Gaw said.
