ECOWISE Holdings said on Monday that it has applied to Singapore Exchange Regulation (SGX RegCo) on Saturday for a four-week time extension to appoint independent directors to fill the vacancies in its audit committee.

 

The Catalist-listed company originally had an Aug 4 deadline to fill the vacancies, and it is now seeking for the deadline to be extended to Sept 3.

 

In May, two independent directors of ecoWise, who had been part of its audit committee, resigned from the company. Since May 7, the company has only one member in its audit committee.

 

Under Catalist rules, companies are required to have a minimum of three members on the audit committee, and in the event of a resignation, have the vacancy filled within three months.

 

ecoWise noted that it had also been issued a notice of compliance from SGX RegCo in June to appoint at least two new independent directors, based on recommendations from independent reputable professional associations, to constitute its new audit committee. These appointments would also need to be approved by SGX RegCo.

 

ecoWise said it had commissioned the Singapore Institute of Directors to search for suitable applicants, and it is currently conducting due diligence and assessing the suitability of a list of shortlisted candidates.

 

The company said it would need more time to complete its assessment as well as to submit the nominated candidates to SGX RegCo for pre-clearance. It expects to be able to complete the appointment process by Sept 3.

CATALIST-LISTED ecoWise Holdings on Friday said any resolutions passed at its proposed extraordinary general meeting (EGM) on Aug 13 will be deemed invalid, as " valid notice had not been given" for the meeting.

 

In a bourse filing on Friday night, the strife-hit company said the first and second notice of the EGM - published respectively in The Business Times (BT) on July 29 and July 30 by two of ecoWise' s shareholders, Tan Swee Boon and Tan Jin Beng Winston - are invalid as they " have not complied with the relevant regulations" .

 

The shareholders had called for the EGM to vote on the removal of ecoWise executive director and deputy CEO Cao Shixuan, and to appoint three new directors - Damien Seah, Nichol Yeo and Calvin Tan.

 

ecoWise said the first notice of the EGM had " inaccurately classified" the proposed resolutions as ordinary business, as the resolutions constitute special business.

 

The notice was also not accompanied with a statement specifying the effect of the proposed resolutions, as is required under Regulation 71 of the constitution of the company.

 

At the time of receipt of the first notice of the EGM and as at Aug 6, the " erroneous" Google link provided did not work, thus not giving shareholders access to the audio broadcast and audio-visual broadcast, as required under the First Schedule of Covid-19 Order, said ecoWise.

 

It added that due to the faulty Google link, shareholders were also not provided with instructions on how to submit questions or matters related to the resolutions that are tabled at the proposed EGM.

 

While the first notice of EGM was published 14 days prior to the intended date of the EGM on Aug 13, it was not concurrently published on SGXNET on the same day it was taken out in BT, and therefore not in compliance with Paragraph 10 of the First Schedule to Covid-19 Order.

 

The second notice of the EGM, published on July 30 in BT, did not satisfy the requisite 14-day notice period. The notice was also not concurrently published on SGXNET, said ecoWise.

 

In a separate update on Sunday, the company said none of the proposed directors to be appointed has been recommended by " independent, reputable" professional associations or bodies.

 

These proposed appointments thus do not satisfy the directives of the Singapore Exchange Regulation (SGX RegCo) in its notice of compliance issued on June 25.

 

ecoWise said it had on June 14 engaged third-party service provider DC Frontiers to investigate the background and qualifications of each of the proposed directors.

 

Based on the investigation reports, Mr Seah and Mr Tan were previously directors of several companies that have since been delisted from SGX.

 

Mr Seah is currently the head of internal audit of Fabchem China Limited, which was issued with a notice of compliance by the SGX RegCo on June 3, 2021.

 

Mr Tan is currently the lead independent director of China Shenshan Orchard Holdings, which was placed on the SGX watch-list in December 2019.

 

Mr Yeo " lacks the relevant experience" of serving as a director of a listed company, said ecoWise.

 

Shares of ecoWise have been suspended from trading since June 18, 2021.

Company says the board had adhered to its internal processes in relation to the termination of Zico Capital

 

STRIFE-HIT ecoWise Holdings has responded to comments made recently by its chief executive officer (CEO) that alleged the company acted without his approval, as well as to those made by a group of shareholders convening an extraordinary general meeting (EGM) to vote on the removal of its deputy CEO.

 

In its response, which was sent to The Business Times (BT) and posted as a bourse announcement on Aug 6, the Catalist company' s " majority directors" - executive director and deputy CEO Cao Shi Xuan and lead independent director (ID) Er Kwong Wah - said they " regret the forum in which (founder and CEO) Lee Thiam Seng has voiced such disagreements" .

 

They added: " This is not the first time Mr Lee has resorted to the use of the media to disclose the affairs of the company, which is not an appropriate forum for such dissenting views, which seems to have disregarded Regulation 120(1) of the company' s constitution which provides that questions arising at any meeting of the directors shall be decided by a majority of votes."

 

ecoWise' s board is currently made up of three directors - Mr Lee, Mr Cao and Mr Er - after two IDs stepped down in May.

 

Mr Lee had told BT on Tuesday that he was " shocked" by ecoWise' s recent moves, and alleged that they had been executed without his consent and over his strong objections. Recent developments include ecoWise' s surprise announcement on July 30 of the termination of its sponsor Zico Capital, and its alleged refusal to announce the EGM to be convened by three shareholders on Aug 13.

 

Mr Lee told BT that the first he had heard of the sponsor' s termination " was near midnight on July 29, when the company secretary circulated a draft board resolution to terminate the sponsor' s engagement with immediate effect" .

 

" There was no discussion, and I objected strongly. Notwithstanding this, the resolution was passed. I had asked that my dissent be noted in the announcement of the termination, but this was wholly ignored."

 

Mr Lee added that " no information has been provided to the board as to any imminent arrangements for a replacement sponsor" .

 

In its response on Friday, ecoWise said " the board had adhered to its internal processes in relation to the termination of Zico Capital" and that " the termination was made pursuant to the provisions of the engagement letter which was entered into between the continuing sponsor and the company on Sept 9, 2019" .

 

It added that Mr Er and Mr Cao had passed a board resolution approving Zico' s termination, and that the basis of the termination had been explained and minuted, with Mr Lee in dissent. It said that Mr Lee' s written request for his dissent to be noted in the announcement was sent to the company only after the bourse announcement was made.

 

It added that its " appointment of a new continuing sponsor is expected to be finalised shortly and the company will make the appropriate announcements in compliance with Catalist Rules" .

 

ecoWise' s July 30 announcement on Zico' s termination had come fresh on the heels of a notice of EGM being taken out in BT on July 29 and 30.

 

The EGM calls for Mr Cao to be removed as a director, and for three new directors - Damien Seah Yang Hwee Yeo Lai Hock, Nichol and Tan Siok Sing Calvin - to be appointed. The three shareholders convening the EGM - Tan Swee Boon, Tan Jin Beng Winston and Sunny Ong Keng Hua - told BT on July 16 that they had notified the company of the EGM that same day, and had provided ecoWise with a notice of EGM and a proxy form for the intended EGM.

 

They said they had asked ecoWise to release the notice and proxy form in a bourse announcement and on the company' s website, but ecoWise has not done so, to date. These same shareholders had requisitioned for an EGM in May, with similar resolutions the company had at first said it would hold the EGM, but then later decided against doing so.

 

One of the shareholders, Mr Tan Swee Boon, told BT that they are " surprised at the manner (in which) the company is handling this" .

 

He added that, for the EGM on Aug 13, " the company took the unreasonable position that they will ' not be sending the notice of EGM and proxy form through an announcement via SGXNet and placing a copy of the same on its website' " .

 

In its response, ecoWise said: " As announced by the company (in a filing to SGXNet) on July 2, in view of the notice of compliance (NOC) issued by Singapore Exchange Regulation (SGX RegCo) on June 25, the company had adopted various safeguards to fulfil the requirements under the NOC and had explained why it would not be in the best interest of the company to convene the EGM for the purposes of voting on the proposed resolutions."

 

SGX RegCo' s NOC had directed ecoWise to appoint two new IDs, commission an internal audit and an audit of its first-half 2021 results, and form a new audit committee, amid concerns about the lack of a strong and independent element on the board, the accuracy of the company' s H1 2021 results, the adequacy and effectiveness of internal controls in relation to ecoWise' s financial reporting, release of announcements, escalation and information flow to the board, and the safeguarding of the group' s assets.

 

ecoWise had said, in its July 2 announcement, that it would " ensure that there are minimal disruptions to the company and its operations, as well as to the composition of the current board, all of whom are familiar with the company' s matters, to ensure that the board would be able to address the SGX RegCo directives satisfactorily" , and that " the proposed removal of Mr Cao from his office as a director of the company would result in unnecessary disruptions to the company" .

 

In its response on Aug 6, ecoWise said: " The company is cognisant of the rights of all shareholders under the Companies Act, in addition to those set out under Catalist Rules.

 

" The company will be making a separate announcement by Aug 10 to update shareholders on the company' s views on, in addition to the validity of the EGM notices, the suitability of the three candidates as proposed by the remaining requisitioning members to be appointed as directors of the company."

 

ecoWise also said that, of the three directors proposed by the shareholders convening the EGM, Mr Seah and Mr Yeo were previously recommended by Mr Lee to Mr Er, " to fill the casual vacancies and be appointed as independent non-executive directors of the company and Mr Lee had prepared directors' resolutions in writing to that effect" .

 

" These directors' resolutions in writing were validly passed, with their appointments subject to further interview by all the directors and clearance by the sponsor, which were not completed as at the date of this announcement," it said. ecoWise shares have been suspended from trading since June 18.

THE troubles besetting Catalist-listed ecoWise Holdings show little sign of abating, and its founder, executive chairman and chief executive Lee Thiam Seng has expressed his " shock" and " concern" over recent moves made by the company, which he says were executed without his consent and over his strong objections.

 

Recent developments include ecoWise' s alleged refusal to announce that an extraordinary general meeting (EGM) of the company would be convened by a group of shareholders on Aug 13. The meeting will vote on the removal of ecoWise' s executive director and deputy CEO Cao Shi Xuan as a director and the appointment of three new directors.

 

The shareholders convening the EGM say they had on July 16 given ecoWise due notice and asked the company to make the announcement, which it has yet to do. The shareholders took out an advertisement in The Business Times on July 30, publishing the EGM notice.

 

This was then followed by a surprise announcement by the company that day that it is parting ways with its sponsor. No replacement was named.

 

ecoWise' s board said a written termination notice was issued to Zico Capital on July 29, and that Zico would cease to be the company' s sponsor either in a month (on Aug 29), or when a new listing sponsor takes over - whichever date is earlier.

 

Queries sent to ecoWise by BT on how and why the two events took place, were fielded by Mr Lee, who said he was " shocked at the sudden move to terminate the sponsor" .

 

" The first I knew about this was near midnight on July 29, when the company secretary circulated a draft board resolution to terminate the sponsor' s engagement with immediate effect. There was no discussion, and I objected strongly.

 

" Notwithstanding this, the resolution was passed. I had asked that my dissent be noted in the announcement of the termination, but this was wholly ignored," he said.

 

He added that it is his view that Zico has " acted with the utmost professionalism and a great amount of dedication" , especially in light of the company' s recent troubles.

 

Under Catalist rules, ecoWise will be suspended until a new sponsor is appointed, although it is not affected by this rule because trading has already been suspended since June 18. But, if it does not have a sponsor for more than three straight months, it risks a delisting.

 

ecoWise' s board said in its announcement that the company is " finalising the appointment of a new continuing sponsor" and will update shareholders when the sponsor is appointed.

 

Mr Lee said: " No information has been provided to the board as to any imminent arrangements for a replacement sponsor. I am very concerned that this abrupt termination of sponsor could have a negative impact on the company at such a critical time. I have registered my concerns with the board."

 

The announcement on Zico' s termination was fresh on the heels of the appearance of the EGM notice in BT.

 

The EGM calls for Mr Cao to be removed as a director, and for three new directors - Damien Seah Yang Hwee Yeo Lai Hock, Nichol and Tan Siok Sing Calvin - to be appointed.

 

The three shareholders convening the EGM - Tan Swee Boon, Tan Jin Beng Winston and Sunny Ong Keng Hua - told BT on July 16 that they had notified the company of the EGM that same day, and had provided ecoWise with a notice of EGM and a proxy form for the intended EGM.

 

They said they had asked ecoWise to confirm by close of business on July 20 that it would release the notice and proxy form in a bourse announcement and on the company' s website.

 

Such an announcement was not made.

 

These same three shareholders had also requisitioned for an EGM in May, with similar resolutions, which the company had at first said it would hold, but then later decided against doing so.

 

One of the shareholders, Mr Tan Swee Boon, told BT that they are " surprised at the manner (in which) the company is handling this" .

 

He said they could not understand why ecoWise backtracked on its decision to hold an EGM based upon their requisition, and why it said that " it would not be in the best interest of the company to convene an EGM in respect of the requisition" .

 

" We are exercising our legal rights as shareholders under the Companies Act, and fail to see why and how the company' s view on what is in the best interests of the company or not is relevant. As far as we know, most other Catalist companies duly act on a shareholder requisition to convene an EGM, and we have not heard of any cases in recent years where a board declines to act on a shareholder requisition, where the validity of the requisition has been confirmed by the company."

 

As for the EGM now taking place on Aug 13, Mr Tan said " the company took the unreasonable position that they will ' not be sending the notice of EGM and proxy form through an announcement via SGXNet and placing a copy of the same on its website' " .

 

" Since the advertisement of the EGM, the company has not communicated to us why they have yet to issue an announcement," he added.

 

In response to BT' s queries to ecoWise on this issue, Mr Lee said: " I have repeatedly asked the board and company secretary to issue the announcement, as I believe it is crucial to keep shareholders updated via the appropriate channel, namely SGXNet.

 

" This lack of information is detrimental to our shareholders. However, such matters need to be approved at board level, where a majority would suffice, and unfortunately I am only one director out of three."

 

ecoWise' s current board is made up of Mr Lee, Mr Cao and lead independent director (ID) Er Kwong Wah. Two IDs had stepped down in May. One cited a lack of proficiency in the Chinese language, and the other said he wanted to channel his focus towards other commitments.

 

Singapore Exchange Regulation (SGX RegCo) has asked ecoWise to appoint two new IDs in a notice of compliance (NOC) served on the company on June 25. The notice also included directives to the company to commission an internal audit and an audit of its first-half 2021 results, and form a new audit committee.

 

SGX RegCo had said then it was concerned about the " lack of a strong and independent element on the board" , the accuracy of the company' s H1 2021 results, the adequacy and effectiveness of internal controls in relation to ecoWise' s financial reporting, release of announcements, escalation and information flow to the board, and the safeguarding of the group' s assets.

 

In response to BT' s queries on the most recent events, SGX RegCo said it " expects ecoWise to heed and take the necessary actions as required in our (NOC), regardless of any EGM and its possible outcome" .

 

With regard to ecoWise' s termination of Zico as its sponsor, SGX RegCo said: " SGX RegCo will continue monitoring the situation and interview the outgoing sponsor. The handover to the new sponsor must be orderly."

CATALIST-LISTED waste management company ecoWise Holdings is parting ways with listing sponsor Zico Capital " after deliberations and for commercial reasons" .

 

ecoWise issued a written termination notice to Zico Capital on July 29, the board disclosed in a bourse filing the next day.

 

As such, Zico Capital will cease to be the company' s sponsor either in a month' s time, on Aug 29, or when a new listing sponsor takes over - whichever date is earlier.

 

Under Catalist rules, ecoWise will be suspended until a new sponsor is appointed - although it is not affected by this rule, as trading has already been suspended since June 18. But, if ecoWise does not have a sponsor for more than three straight months, it risks delisting.

 

The board said that the company is " finalising the appointment of a new continuing sponsor" and will update shareholders when this new sponsor is appointed.