THE board of directors of Fu Yu Corporation on Friday (Jan 31) announced that the company will not convene an extraordinary general meeting (EGM) requisitioned by Victor Lim, its largest shareholder.
In a bourse filing, the precision plastic components manufacturer said that it had obtained legal advice stating that the requisition did not meet the legal requirements and was insufficient to invoke Section 176 of the Companies Act.
Lim is not a member of the company as defined by the Act, even though he owns the beneficial interest in the shares described in his letter.
Fu Yu’s independent directors also obtained separate legal advice with similar points. They remain committed to working with the company and engaging Lim in constructive dialogue.
The board has considered the needs and interests of shareholders including Lim, and concluded that an EGM and any resolutions passed would be invalid and may expend company resources unnecessarily.
Fu Yu’s legal counsel has been instructed by the board to reach out to Lim to clarify his concerns and reasons for the requisition.
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“The board reiterates its commitment to cooperate in assisting its members who submit valid requisitions to convene general meetings,” the company said in the filing.
Internal audit findings
Separately, the board announced an investigation into Fu Yu Supply Chain Solutions (FYSCS), a wholly owned subsidiary of Fu Yu, following an internal audit. The internal audit report – dated Jul 26, 2024, and received by the board on Aug 7 – showed that the business unit was assessed to have cause for considerable concern.
The report found significant weaknesses in FYSCS’ risk management process that could expose the unit to unacceptable levels of risk if left uncorrected. Besides the initial scope of the report, the internal audit team also identified additional risk areas.
In acting on the findings of the report, Fu Yu’s board engaged law firm Damodara Ong on Oct 8, 2024, to conduct an investigation into the affairs of FYSCS. The investigation is still ongoing, with the board awaiting updates.
Shares of Fu Yu closed up 0.8 per cent or S$0.001 at S$0.127 on Friday.
