by behappyalways » Sat Mar 12, 2011 4:56 am
From The Business Times
Published March 12, 2011
Bid for Full Apex meeting came from Pope Asset Management
By LYNN KAN
THE substantial shareholder whose requisition for a special general meeting over an asset sale was rejected by Full Apex (Holdings) is Tennessee-based Pope Asset Management.
I can't say what we'd do on trading in the future, since so many things are dependent on price and how the industry goes. We're still positive on the industry, but disappointed in the transaction.
-- Bill Wells,
Pope Asset's portfolio manager
Pope Asset's portfolio manager, Bill Wells, told BT he was 'not surprised, but still disappointed' that the circumstances behind the sale of Full Apex subsidiary, Favour Development Limited (FDL), to Winwhole Limited would not get an airing among shareholders like himself.
The proposed meeting called for shareholders to vote on terminating the FDL sale; to appoint an independent financial auditor to look into the transaction; and to examine the relationship between the CEO of Winwhole, Mai Zhuo-xing, and Full Apex's directors, executive officers and controlling shareholders.
Full Apex clarified last night in an announcement that it declined to act on the requisition notice dated Feb 16 as the sale of FDL to Winwhole for HK$85 million had been completed on Dec 24 last year.
It added that it had also already disclosed the independence of Winwhole and Mr Mai from its own directors, CEO and shareholders.
Filings on the SGX stated that Mr Mai is a 'business acquaintance' of Guan Lingxiang, but Mr Wells wants to know more.
Pope Asset, which has a 12.4 per cent interest in the company, went ahead with the requisition after it 'couldn't get any real answers' from the PET bottle manufacturer about its reorganisation in October 2010, and why it sold off FDL, the company's most profitable unit.
Mr Wells said FDL makes up about 95 per cent of the company's net profits in FY2009.
A recent share buyback of four million shares in December by the company also raised questions for Mr Wells: 'Why did they turn around and buy shares on the open market at 8x to 10x, and sell shares to Winwhole at a lower multiple of about 3x?'
'We've been trying to get an answer to all that that made sense, and couldn't come up with a good one. We wanted an independent auditor to look into the whole transaction so that our interests are protected,' said Mr Wells.
Lawyers BT spoke to said that it is debatable whether a disposal - such as FDL to Winwhole - would require the Bermuda-incorporated company to agree to a shareholder's requisition for a meeting.
Under Bermuda law, companies can decline a requisition if the matters tabled fall strictly under the scope of the directors, such as the management of a business. Only if the matter pertains to issues concerning shareholders must the company agree to the requisited meeting.
An asset sale could straddle the grey area between both.
For now, Pope Asset is still, however, holding on to its stake in Full Apex. The firm with a value investment approach increased its holdings in the company by buying 12.1 million shares on Dec 31.
It first invested in the company in October 2007 to ride on the growth of the Chinese soft drinks industry, which Full Apex supplies to.
'I can't say what we'd do on trading in the future, since so many things are dependent on price and how the industry goes,' said Mr Wells. 'We're still positive on the industry, but disappointed in the transaction.'
The stock of Full Apex closed one cent down at 22 cents yesterday.
血要热 头脑要冷 骨头要硬
