SINGAPORE (March 24): USP Group, which has been facing a minority revolt, has finally called an extraordinary general meeting. But it is not quite for the reasons listed in the shareholders' requisition.
In a statement filed with the stock exchange late on Thursday night, USP said it will hold an EGM on April 7, for shareholders to vote on the appointment of RSM Chio Lim as the company's auditors.
The EGM will be held at the address of Supratechnic, a distributor of marine equipment that USP acquired from three vendors last year.
One vendor was Joshua Huang, now one of two requisitioning shareholders who are taking USP to task on a number of issues.
Among those raised in a letter accompanying the EGM requisition dated Feb 10, were that USP's board did not act soundly in relation to the company's investment in loss-making contract manufacturer Huan Hsin Holdings, and privately-held company SG Support Services.
The two shareholders also questioned the divestment of two Chinese subsidiaries at less than their book value, and queried the independence of one of USP's two independent directors.
At the time of the requisition, Huang and his fellow shareholder Teng Choon Fong collectively held more than 11% of the company.
In yet another development, however, it seems that Huang's stake in the company has now been diluted somewhat.
In another filing late last night, USP announced that it is issuing 1,228,011 new shares at 8.6 cents each to Eu-Nic Builders as downpayment for the construction of a project contracted in September last year.
The statement explained that Eu-Nic had "subsequently agreed" to have the 15% downpayment of $105,609 in the form of shares, "as they believe the value of the company’s shares would appreciate over time and worth more than the money they would receive if the down payment is made in cash."
These shares are to be issued along with another 4.9 million shares to Precious Stream Holdings, at 19.5 cents each. This lot is repayment for the shares that were loaned to USP for payment to Huang in the acquisition of Supratechnic.
Precious Stream, a British Virgin Islands-incorporated vehicle, is USP's largest shareholder. Its sole director and shareholder is one Weng Huixin.
Huang, in a March 15 letter to the company, had queried Weng's relationship to Li, noting that the two are listed as current or former directors or shareholders of other Singapore entities, including Sunmax Global Capital Fund I.
Following the issuance of these shares, USP's share capital has been enlarged from 83,768,352 to 89,896,363.
USP was formerly a metals trader known as Unionmet (Singapore). In July 2013, Li Hua was appointed as its chairman and CEO. The company then acquired a range of new businesses, including oil blending and property development.
Li and Sunmax made headlines last year when the courts awarded them nearly $17.5 million in damages, in a lawsuit that was brought against them by eight parties led by Quah Su-Ling.
Quah and John Soh Chee Wen were charged last November for "orchestrating a massive fraud" to manipulate the market for shares in Blumont Group, LionGold Corp and Asiasons Capital (now known as Attilan Group) between August 2012 and October 2013.
USP shares last traded at 14 cents.
