Yongnam Holdings CEO and Managing Director Seow Soon Yong, or SY, acquired 21.49 million shares in an off-market transaction at S$0.1948 each on Friday, to protect his interest in the company after a loan deal went south, it said in a filing to SGX after the market close on Monday.
In August, SY had entered a loan agreement with LC Finance with a maturity date of 1 December and had charged 31 million Yongnam shares, or 5.93 percent of the company, in favor of Lioncap Global Management as security for the loan, the filing said.
Following unanswered communications made to LC Finance and Lioncap Global, including a visit to their last known office premises, and a review of the company’s list of shareholders maintained by Central Depository, SY now has reason to believe the charged shares were disposed of by one or both of the parties, the filing said.
That would be a breach of the terms of the loan, the filing alleged.
SY also has reason to believe that the either or both of the parties aren’t capable of re-delivering the charged shares when the loan matures, it said.
He intends to begin legal proceedings against one or both of the parties over the alleged breach of the loan terms and the charged shares for the equivalent value of the charged shares, the filing said.
The CEO now has a direct interest of 97.69 million shares, including the 21.49 million purchased on Friday, as well as a deemed interest in 4.08 million shares held by Yongnam Pte. Ltd., in which SY holds a 75 percent interest, and a deemed interest in the 31 million charged shares, the filing said.
The transaction raised his deemed interest to 6.71 percent from 0.78 percent, while his direct interest fell to 18.7 percent from 20.51 percent, with a total interest of 25.41 percent, up from 21.29 percent previously, it said.
Shenton Wire contacted Lioncap Global via its website after office hours to seek comment on the filing; Shenton Wire was unable to determine a contact for LC Finance.