Raffles Education said on Monday it wasn’t required to and would not be convening an extraordinary general meeting (EGM) after two shareholders sent a letter seeking the meeting in an effort to scuttle plans for a rights offering.
“The company has obtained legal advice on the contents of the letter, and is advised that the proposed resolution is invalid and/or would be ineffective in light of the share issue mandate approved by the shareholders at the annual general meeting held on 29 October 2018,” Raffles Education said in a filing to SGX on Monday.
The share issue mandate, which was approved with nearly 95 percent of votes at the AGM, specifically authorized the board to issue shares, including via rights or bonus issues, totaling not more than 50 percent of the total number of issued shares, Raffles Educations said.
The company added that the shareholders can not circumvent the share issue mandate via their proposed resolution.
In mid-December, Oei Hong Leong and Oei Hong Leong Art Museum sent a letter to the company stating that they hold more than 10 percent of Raffles Education’s issued shares and that they required the meeting be convened under section 176 of the Companies Act of Singapore.
Under section 176, holders of at least 10 percent of a company’s shares can requisition the company to call an extraordinary general meeting within two months as long as they have stated the object of the meeting and signed the requisition.
Raffles Education said the two shareholders had been seeking an individual vote on the following resolution: “That the proposed rights issue of up to 275,858,734 new ordinary shares in the company with the rights issue proceeds to settle the company’s Chairman and Chief Executive Officer, Mr. Chew Hua Seng’s loans to the company as announced by the company on the 6 December 2018 be terminated immediately.”
The company added that while the rights issue was earmarked to partially repay the interest-free loan from Chew, as stated in the resolution, it was also aiming to raise capital for general corporate and working capital purposes.
According to SGX data, Oei Hong Leong holds 9.76 percent of Raffles Education, while Oei Hong Leong Art Museum holds 3.14 percent.