Published October 8, 2008

Letter questions ability of Thakral chairman

Hong Leong letter voices concern that he is infirm and not chairing meetings

By EMILYN YAP
Email this article
Print article
Feedback

THE fight for control at Thakral Corporation Ltd (TCL) has intensified, with the key players laying out their cases to drum up shareholder support.

Mr Singh: The 74-year-old said that his age and experience are, in fact, plus points

TCL hit the headlines last month when its major shareholder, Hong Leong Group, called for the removal of chairman Kartar Singh Thakral as a director.

In the latest development, Hong Leong issued a letter last Friday through its units Venture Delta and Grace Star Services, expressing concern at Mr Singh's age and his ability to remain as executive director and chairman.

Based on TCL's 2007 annual report, Mr Singh is 74.

'We have observed his infirmity and understand that the vice-chairman has been chairing most board meetings,' the Hong Leong units said.

Mr Singh's participation and contribution to TCL is diminished, according to them. 'In view of the many challenges facing TCL currently, with a potential change in its business strategy, we believe this is an appropriate time for him to be replaced and thereafter, a new chairman to be appointed.'

TCL said in May that it could divest its consumer electronics distribution business to reposition itself in real estate.

The letter from Venture Delta and Grace Star Services surfaced yesterday. They are indirect subsidiaries of Hong Leong Asia (HLA) and hold a 34.42 per cent stake in TCL through HLA unit China Yuchai International (CYI).

Countering Hong Leong's concerns in a letter of his own, Mr Singh said that his age and experience are, in fact, plus points. 'It is my desire to continue to extend the benefit of my experience to the board of TCL and to see TCL repositioned as quickly as possible,' he said. 'The role of a chairman does not begin and end with chairing board meetings.'

Mr Singh said that a chairman also has to be available at all times to handle day-to-day problems and guide senior management.

Asked for a reaction to this, a CYI spokesperson said: 'We disagree. TCL's articles of association say the role of a chairman is to preside at all meetings.'

Hong Leong requested last month that CYI chief financial officer Hoh Weng Ming be appointed a TCL director.

According to Venture Delta and Grace Star Services, TCL's board had three HLA-nominated directors but this dropped to two after one failed to win re-election. This was because of 'votes against his re-election by, among others, the Thakral group and the Babcock group'.

The Thakral family owns a 12.71 per cent stake of TCL. There are three Thakral group nominee directors on the board. Babcock & Brown holds an 8.93 per cent stake.

Venture Delta and Grace Star Services are requesting a replacement director 'since the current composition of the TCL board does not represent accurately the shareholding structure of TCL'.

TCL shareholders will vote on Mr Singh's future and the appointment of Mr Hoh at an extraordinary general meeting on Oct 15.