SINGAPORE (June 12): Mining company Rich Capital Holdings’ (Rich Capital) shareholders on Thursday sent an open letter via email to the company calling for an extraordinary general meeting (EGM) to prevent the company’s subsidiaries Rich Batam and Oxley Batam from entering its Batam development into any terms of settlement or payment.
The letter also asked for the appointment of two directors within Rich Capital.
The shareholders, Bai Fengmei, He Xiaocong, Tan Hong Eng, and Oh Keh Yew, who own over 10% of shares in Rich Capital Holdings, have sent in a letter to call for an EGM previously on May 19.
In their previous letter, the shareholders proposed six ordinary resolutions, one of which, was to appoint a third director, and the other, to remove any directors who were appointed between the date of the letter and the proposed EGM. These resolutions were not present in their most recent letter sent on Thursday.
In a response to SGX’s queries on May 28, Rich Capital Holdings stated that it has a 40% stake in PT Oxley Karya Indo Batam (PT OKIB), and does not have majority control over PT OKIB.
The company’s wholly-owned direct subsidiary, Rich Batam, owns a direct 80% interest in Oxley Batam. Oxley Batam is an equal shareholder and joint venture partner with PT Karya Indo Batam (PT KIB) in the Batam project.
According to Rich Capital Holdings, the company does not have any representation on the board of directors of PT OKIB following the resignation of its two directors, Oh Si Kai and Wang Zhen Wen, on Dec 26, 2018, and Nov 14, 2019, respectively. PT OKIB’s board and shareholder PT KIB have since refused to process any replacement nominees to the board.
On Sept 13, 2019, Rich Capital announced via an SGX filing, that it has received two legal letters dated July 29, 2019, and Aug 13, 2019, from an Indonesian law firm appointed by PT KIB. They were addressed to controlling shareholder and director Wang Zhen Wen, and Rich Capital’s associate Rich-Link Construction (RLC).
The letters alleged a conspiracy and breaches of the interested persons transaction (IPT) Mandate and Indonesian criminal laws with regards to the appointment of RLC as the main contractor.
The letters also alleged that a $2 million advance payment was made by Rich Capital on behalf of PT OKIB to RLC.
KIB is seeking full control of PT OKIB, and a compensation of $20 million.
Rich Capital said in the same filing on Sept 13, 2019, that it has formally rejected and denied the allegations through its Indonesian lawyers on Aug 16, 2019. The company also said that RLC has refunded the $2 million advance payment when the advance payment guarantee was not provided by RLC as required under the Letter of Award.
It maintained that there has been no conspiracy or breaches of Indonesian criminal laws, and that KIB is not entitled to any restitution or compensation.
On Sept 9, 2019, PT OKIB received a notice of default from its main contractor, Rich-Link Konstruksi, demanding certain certified progress payment, or it would suspend work and/or terminate the contract.
PT OKIB has on 12 September 2019 replied to deny the claim and insist on continued performance.
On Oct 2, 2019, PT OKIB received a notice of suspension from its main contractor Rich-Link Konstruksi (RLK), to withhold work, on PT OKIB’s failure to make payment for the project at Oxley Convention City, Batam, failure to certify further progress payments, and failure to certify RLK’s extension of time requests.
On the same day, Rich Capital announced it has reached an in-principle amicable settlement on the issues with KIB and has entered into a non-binding term sheet with Oxley Batam, KIB, Singba Grecon (SGPL) and Oxley Holdings, for the sale of 30% shareholding interests in PT OKIB held by Oxley Batam to SGPL for some $2.0 million (an equivalent of US$1 per share based on the share capital of PT OKIB).
On Oct 23, 2019, PT OKIB received a notice of termination from RLK on grounds of PT OKIB’s “continued breaches”. PT OKIB formally refuted the allegations on Oct 24, 2019.
On Jan 23, 2020, Rich Capital received a legal letter alleging unlawful conspiracy by Wang Zhen Wen, Aldrin Tai, the employer’s representative for the project, RLC, and Oxley Batam. The letter also alleged breaches of duties by Wang and Tai.
Rich Capital announced on Mar 16, 2020, that it has made a police report to the Commercial Affairs Department (CAD) in relation to the construction, development, management, and operation of Oxley Convention City in Batam. The report also mentioned the advance payment of $2 million paid to Rich-Link Construction, which was discovered on May 29, 2019.
Shares in Rich Capital Holdings last traded at 0.3 cents before its trading halt on June 24, 2019, and voluntary trading suspension on June 27, 2019.
