After shareholders rejected the proposed reverse takeover (RTO) of Scope Industries Bhd a fortnight ago, the board of directors at Matang Holdings Bhd resigned yesterday.

In a statement, the company said the resignations, effective yesterday, is "a gesture to respect the decision of shareholders on May 31 to reject the reverse takeover".

The statement continued: "It was rather unfortunate to see the transaction had been politicised by some people.

"We admit our communication with shareholders regarding the RTO was inadequate, hence resulting in the exploitation of the issue by some quarters.

"We would like to stress we made decisions based on the investment banker's recommendation and in the best interest of Matang shareholders.

"We hope the new board of directors will continue to serve shareholders effectively and ensure the company to grow steadily and progressively."

Differing views threatened MCA split

Matang Holdings was set up by Johor MCA in the 1980s to pool the resources of its members to go big in business.

The disposal of Matang was viewed by critics as an asset stripping exercise by the present MCA leadership before the next party elections because of the terms and conditions of the deal did not seem to benefit the Matang shareholders.

The ACE Market-listed Scope incurred losses in recent quarters, compared to cash-rich Matang with oil palm plantations.

Doubts have also been raised on this so-called RTO, as Matang will not be in control of Scope after the corporate exercise is completed.

NONE While MCA president Chua Soi Lek ( right in photo ) was keen to inject Matang into Scope, his deputy Liow Tiong Lai ( left in photo ) and youth chief Wee Ka Siong, were among those who voiced concern, saying MCA members who have held on to the shares for 30 years would be shortchanged.

The divergence in views of these two camps in Matang threatened to split MCA further.

Chua was urged to quit his post following a humiliating defeat by the MCA in the last month's general election.

Stirring the pot further ahead of the May 31 shareholders meeting was another unconditional cash offer of RM148 million for Matang, trumping Scope's offer of RM145 million. Also, valuation firm Henry Butcher valued Matang at RM160 million.

Chua: Residantion a rational move

In a separate statement, Chua said: "I laud the decision by the Matang board as it has taken a right move to ensure accountability to shareholders.

"It was also a rational move by the Huaren Holdings as the largest shareholders of Matang, choosing not to vote during the (shareholders) meeting on May 31 not just to protect the benefit of Matang shareholders but also to prevent some quarters who had vested personal interest to exploit the transaction."

Minority shareholder representative Tan Teck Poh said the resignations should have happened earlier.

"Directors must look after shareholders, not just the interests of a few. They made some bad decisions so they must resign," said Tan, who is also the Parit Sulong MCA division chairperson.

He said this was a good opportunity for shareholders to appoint new directors who knew how to work.

"No more lawyers. They only know law. They don't know economics or how to manage a business," Tan added with a laugh.

- The Malay Mail