FU YU’S largest shareholder has called for an extraordinary general meeting (EGM) to remove two directors amid dropping shareholder value and what he described as the company’s poor performance.
The company has received a requisition notice from Victor Lim to convene the EGM to pass five resolutions in total.
Lim, who owns some 29.45 per cent of Fu Yu shares, called for the meeting as he believes a “strategic reset” and reorganisation of the board is needed amid the company’s “poor performance”.
The first and second resolutions seek to remove Christopher Huang and Royston Tan as the company’s directors, from the date of the EGM.
“Since the election of Huang and Tan to the board, substantial shareholder value has been erased,” said Lim in his letter on Thursday (Jan 9).
He noted that Fu Yu’s share price has “dropped steadily” from S$0.33 in 2021 to S$0.13 as at Jan 9 – a decline of more than 60 per cent.
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“The net profits of the company have also deteriorated from approximately S$17.6 million in 2021 to a net loss of S$10.1 million in 2023,” added Lim, who has been employed by Fu Yu as director of strategy since 2021.
However, for the first half ended Jun 30, 2024, Fu Yu recorded a net profit of S$72,000, reversing from a loss of S$3.9 million in the previous corresponding period. Revenue for H1 amounted to S$126.7 million, up 78 per cent from the year-ago period.
The improvement in its top and bottom lines came amid stronger contributions from both the manufacturing and supply-chain management segments.
The precision plastic parts maker had said then that it expects higher order volumes and inquiries for new projects. It was also positive that business momentum would continue to grow in the second half of 2024.
In its business update for the nine months ended September 2024, Fu Yu’s operating profit stood at S$800,000, reversing from a loss of S$6.5 million. Revenue rose 55.2 per cent on the year to S$162 million, buoyed by higher sales in the manufacturing and supply-chain solutions segments.
Lim previously held shares in the company via a fund, but that has since been wound down. He now holds the shares directly, said Fu Yu in a bourse filing on Dec 19.
His three other resolutions involve appointing Gilbert Rodrigues, Ralf Pilarczyk and Yang Zhenrong as directors of the company, from the date of the EGM.
Rodrigues, 67, is an adviser to Str8Bat Solutions India, which provides training tools for young cricket players. Pilarczyk, 55, is the managing director and regional head of mergers and acquisitions for South-east Asia at Standard Chartered Bank in Singapore.
Yang, 44, is the chief executive of Siix-Orient Technology and managing director of engineering consultant Orient Technology.
If the three resolutions are approved, the trio will be designated as independent non-executive directors of the company, said Lim.
In response to his letter, Fu Yu said the board will convene an EGM in due course and provide further updates to shareholders when there are material developments.
Shares of Fu Yu were trading flat at S$0.127 as at 9.25 am on Friday.
