NMG explains events of shareholders' meet

Everything was done according to the law, as both major shareholding groups were barred from casting their votes at the meeting, he said. 

Nittimon’s responses to the SET’s questions include the following:

 

WERE SOME SHAREHOLDERS NOT ALLOWED TO JOIN THE MEETING ON APRIL 29?

As chairman of NMG, Nittimon said there had been queries on widespread news reports that a group of people had invested in the shares of the company with the view of taking it over without abiding by the laws and regulations on corporate takeovers and tender offers. 

This was unfair to previous shareholders. As chairman of NMG and its annual shareholders’ meeting, he exercised Articles 104 and 105 of the Public Company Act and Articles 34 and 35(2) of the company’s articles of incorporation to disallow a group of shareholders from participating in the meeting. These shareholders bought the shares of NMG only recently. 

There have been widespread news reports on a series of disputes between the new group of shareholders and Suthichai Yoon and Sermsin Samalapa, both significant shareholders of NMG, who also did not adhere to the laws and regulations on takeover tenders. So, as chairman, he also barred both persons from voting on all agenda items of the shareholders’ meeting. 

This was to ensure fairness to the new group of shareholders, which was not allowed into the meeting. Subsequently, both sides were on par on being prevented from casting their votes in the election of directors to replace rotating directors whose terms had expired. Thus there would no change in management authority until the dispute over the takeover tender is settled. 

 

SOME SHAREHOLDERS DISALLOWED FROM PARTICIPATING IN THE SHAREHOLDERS’ MEETING WERE THOSE WITH RIGHTS AS REGISTERED AS DIRECTED BY THE BOARD OF DIRECTORS?

Those who were barred from the annual shareholders’ meeting were those with rights as recorded up to April 9. They accounted for a combined 45 per cent of paid-up capital.

 

THE CHAIRMAN DID NOT ALLOW SOME SHAREHOLDERS TO PARTICIPATE IN THE SHAREHOLDERS’ MEETING – WAS THIS WITHIN THE LAW AND COMPANY REGULATIONS? 

The chairman exercised his judgement and ordered the new shareholder group not to be allowed to participate in the shareholders’ meeting and barred Suthichai and Sermsin from voting. Reasons that were given to the shareholders and related parties on April 29 were widely reported by the media. 

There were also numerous inquiries from many small shareholders about the abnormality in share acquisition by the new shareholders group. More than 900 minority shareholders had either come to attend the annual shareholders’ meeting or had given proxies to management and old shareholders. Thus the chairman had reasonable doubt about the recent acquisition of shares by the new shareholding group, whether it was intending to vote together to take over the company, bypassing the laws and regulations on tender offers.

The laws and regulations are clear on a tender offer for fairness to all shareholders. As queried by the chairman that the new shareholding group has together more than 25 per cent of paid-up capital, they must make a tender (at more than Bt3 per share) to give an opportunity to other shareholders to continue holding equity in the company or sell their shares under the different policy direction from the new shareholding group. 

And if the new shareholding group does not intend to make a tender offer or doesn’t have sufficient financing to buy all the shares, it is obliged to reduce its combined holding to less than 25 per cent. 

The laws and regulations on tenders stipulate clearly that those shareholders reducing their shareholdings must waive the right to vote in the shareholders’ meeting consequently.

On the query on violation of tender-offer laws, the chairman found widespread news reports that Solution Corner (1998) Plc (SLC) (as one of the new shareholder entities) might have violated the radio and broadcasting regulations as well as a petition by SLC minority investors that the company did not seek correct approval from its shareholders on NMG’s common shares and warrants. 

These would nullify the legitimacy of its shareholding in NMG.

The NMG chairman honesty believed that the new shareholding group, if allowed to attend the meeting, would have exercised its majority votes to take over NMG through appointing more than half of the board. 

Thereafter, if it is found to have violated securities regulations and radio and broadcasting laws and share/assets shareholder approval regulations, it would be unable to return what has been done to its former status, causing impacts on previous shareholders. 

A subsequent share reduction or tender offer would have been unfair and rendered damages to the previous shareholding group of NMG.

The chairman regarded that if the share acquisition by the new shareholding group was made illegal, voting results were also illegal. It is his duty to promote the interests of all shareholders and exercise caution until the truth is revealed.

NMG has asked various agencies to investigate the matter with haste and it is within the mandate of the chairman to protect the rights of all shareholders under the circumstances.

The chairman also explained that both Suthichai and Sermsin were allowed into the shareholders’ meeting since both were directors. 

But the combined shareholding of both does not exceed the regulatory threshold to have to make a tender offer, as called for by the new shareholding group. Both men, however, were not permitted to vote on any of the shareholders’ meeting’s agenda items.

The agenda item on the appointment of new directors did not take place for fairness to all sides and to prevent any possible damage to NMG. Once the situation clears, the company can always hold another shareholders’ meeting. 

At the annual shareholders’ meeting, the chairman was unsure then of the financial status of the company. The issuance of Bt2.5-billion debentures was allowed to be considered by shareholders and they finally approved it. But the issuance of debentures was put on the back burner after a subsequent board of directors’ meeting on April 30. 

Having been assured that there was no urgent need for a new cash injection, the board halted the issue and will seek shareholders’ approval again if it becomes necessary.