Published April 11, 2009

Kian Ho director who faces removal tells his story

He'll continue to work till AGM, and seek to get company tell shareholders why it wants him to resign

By UMA SHANKARI

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A SUBSTANTIAL shareholder of Kian Ho Bearings is seeking to oust an independent director from the board at the company's April 27 annual general meeting. But Tan Lye Huat, the director in question, told BT that although being booted out at the AGM is the 'most likely outcome', he will focus on discharging his fiduciary duties until then. He will also seek to get the company to tell shareholders why it wants him to resign.

Mr Tan urged all shareholders to study all documents so they can make an informed decision.

In Kian Ho's AGM notice posted on the Singapore Exchange (SGX) website on Thursday, the resolution to remove Mr Tan was tabled by Amanda Marie Teo Xian-Hui, daughter of the company's managing director Teo Teng Beng.

The notice also said three letters pertaining to Mr Tan's removal were enclosed separately. The first, dated March 16, was from Ms Teo requesting Mr Tan's removal. There was also a representation letter from Mr Tan on March 25 and a letter from the company to shareholders on March 30. However, Kian Ho did not post the contents of the three letters online.

Under SGX rules, listed companies are required to give detailed reasons for resignations by directors.

Contacted yesterday, Mr Tan said that when he was confronted with a request for resignation from Kian Ho's executive committee, he had only two choices: to resign immediately as requested, or to continue fufilling his duties until all shareholders had a chance to determine his fate at the AGM.

'In the latter case, even if I were booted out, in the most likely outcome, I would have discharged my fiduciary duties and responsibilities and provided greater transparency to shareholders on the circumstances leading to my situation,' he said. 'I believe this is the right thing to do, even though it is more testing and unpleasant for me.'

In the meantime, he is reviewing information that has been sent to shareholders and will respond accordingly. He urged all shareholders to study all documents so they can make an informed decision at the upcoming AGM.

Mr Tan has been an independent non-executive director of Kian Ho since December 1999. He is also chief executive of HIM Governance, which provides corporate governance advisory services.

According to Kian Ho's 2007 annual report - the latest available online - Ms Teo held 13.3 per cent of the company's shares on March 26, 2008, while Mr Teo held another 1.7 per cent. Another major shareholder, Tat Hong Holdings, had a deemed stake of 30.2 per cent.

Kian Ho, which distributes and retails bearings and seals, could not be reached for comment yesterday. The company's shares closed at 14.5 cents on April 7, the last day the stock was traded.