A DIRECTOR of Transcorp Holdings' subsidiary, Regal Motors, has ceased legal action to recover S$2.64 million from a supplier without consulting Transcorp.

 

Transcorp, which owns an 89.5 per cent stake in Regal Motors, said it is pursuing this matter with the director, Ronnie Chua Heng Chuan, by seeking him out for a " meeting and discussion" .

 

The company also filed a police report on Oct 16 on this matter, due to the unexplained " irregularities" in the director' s actions, and an ongoing Commercial Affairs Department (CAD) investigation involving financial and other information provided by Regal Motors.

 

Regal Motors had on Dec 17 last year received a notice from CAD to provide financial information and corporate e-mail accounts of past employees to assist in an ongoing investigation. Transcorp announced this on Dec 24 last year.

 

Transcorp said on Friday that, subject to investigations arising from the police report it made and the availability of financial resources, it may also pursue a " legal review" of Mr Chua' s fiduciary obligations as the sole statutory director of Regal Motors.

 

The company first directed Regal Motors to pursue legal action against its supplier in March last year. Under Transcorp' s direction, Mr Chua formally commenced the legal action in July 2019. He later authorised representatives from Transcorp to negotiate a settlement in March 2020.

 

But on Oct 13, Mr Chua instructed the external legal counsel to stop all work on the legal action and to file a notice of discontinuance in the suit to the defendants' lawyers, with each party to bear their own cost. This was done " without any directive from or consultation with" Transcorp.

 

When Transcorp found out, it said it immediately informed the legal counsel not to proceed with the action, but the legal counsel would only take instructions from a director of Regal Motors.

 

The company also contacted Mr Chua, but he was " not forthcoming" and has not responded to the company' s queries nor requests for a meeting since.

TRANSCORP Holdings is unable to make an exit offer to its shareholders, and one of its controlling shareholders has indicated that it does not intend to make such an offer.

 

The Catalist-listed firm announced in its regulatory statement to the Singapore Exchange on Tuesday that shareholder SG Royal Group, which holds a stake of 26.21 per cent, does not intend to make an exit offer to minority shareholders upon the delisting of Transcorp.

 

Another shareholder with a stake of 24.02 per cent, Cheng Mingming, has not responded to Transcorp' s letter on an exit offer.

 

The company is thus unable to say whether the controlling shareholders will make an exit offer to shareholders by the deadline stipulated by the Singapore Exchange - that is, no later than a month from the date of the delisting notification of Sept 14.

 

Transcorp used to be in the automobile sales business, but has been deemed as a cash company since May 4, after exiting the unprofitable business of selling and renting out cars.

 

Transcorp said: " Based on the company' s current financial position and status, the company is not able to make any exit offer to its shareholders. However, the company is currently in the process of assessing the feasibility of monetising certain assets and targets to provide an update to shareholders by November 2020."

 

Separately, it has received a letter of demand from Fuji Xerox Singapore, arising from an ongoing legal suit between the parties Transcorp is being asked to pay S$26,382.04.

 

The counter has been suspended since December last year.