UNICO ... Aug 2008

Unico Holdings has proposed a capital reduction exercise followed by the distribution of Unico-Desa shares to its 22,200 shareholders on the basis of 2,560 Unico-Desa 25-sen shares for every 1,000 Unico Holdings RM1 shares held.

The scheme was denounced by former Unico Holdings director Tan Kai Hee, who claimed the proposed capital reduction and distribution of Unico-Desa shares was detrimental to the interests of minority shareholders. Small shareholders could gain more from an en bloc sale to a major buyer instead of receiving the distributed shares.

However, key leaders of Unico Holdings replied that the proposal would allow Unico Holdings shareholders to cash out after holding the unlisted shares for more than 20 years.

The SC is actively reviewing complaints from minority shareholders of Unico Holdings Bhd on the proposed capital reduction and distribution of Unico-Desa Plantations Bhd shares. The SC has received complaints from minority shareholders of Unico Holdings in relation to its 29% interest in Unico-Desa and is actively reviewing the matter.

While shareholder disputes must be resolved in accordance with the law, the SC will not hesitate to take appropriate enforcement action if there is a breach of securities laws. There are relevant provisions in the securities laws for the protection of minority shareholders.

The Unico Holdings board has since been embroiled in a bitter tussle with Tan, forcing the Associated Chinese Chambers of Commerce and Industry of Malaysia president Tan Sri William Chen to intervene but all efforts failed.

Tan was granted a High Court injunction to stop Unico Holdings from holding an EGM to pass a resolution on the capital reduction exercise. The company’s AGM, however, proceeded as planned on Aug 6 2008. The minority shareholders were hopeful that all issues could be resolved before the Unico-Desa AGM on Aug 28 2008.

The rationale for the company’s decision to venture into the credit and leasing business would also be raised at the AGM.