Raf­fles Ed­u­ca­tion boss seeks in­vestor sup­port

He ad­dresses share­hold­ers at AGM, a day af­ter ty­coon Oei Hong Leong calls for his re­moval

The Straits Times - - HOME - Marissa Lee

Raf­fles Ed­u­ca­tion boss Chew Hua Seng yes­ter­day urged in­vestors to give him more time to de­liver on his prom­ises, de­spite the com­pany post­ing a net loss over the last year.

But Mr Chew re­fused to dis­cuss mat­ters re­lat­ing to lo­cal bil­lion­aire Oei Hong Leong – a long-time in­vestor turned an­tag­o­nist who de­liv­ered a let­ter to the board of di­rec­tors on Thurs­day, call­ing for Mr Chew’s re­moval from the com­pany.

When asked what he was do­ing to turn the busi­ness around, Mr Chew told a packed room at the firm’s an­nual gen­eral meet­ing (AGM) in Novo­tel Sin­ga­pore Clarke Quay: “I recog­nise that the profit is not show­ing.

“I just need you to give me con­tin­ued sup­port and this year, I can al­ready tell you that our num­bers are pos­i­tive... I can bring a lot of staff here to tell you that our num­bers are grow­ing.”

Still, some share­hold­ers were ap­pre­hen­sive. One in­vestor brought up Mr Chew’s re­cent de­ci­sion to place out new shares at 30 cents apiece: “That’s way below the pro­jec­tion of the com­pany’s fu­ture that you are giv­ing, and way below the net as­set value (NAV) per share.

“When you’re di­lut­ing at 30 cents, the whole story falls apart.”

The group had a NAV per share of 54.6 cents as at June 30.

Mr Chew said the com­pany needed fresh cash to fund ex­pan­sion, ac­cord­ing to peo­ple who were at the meet­ing. He said the firm had gone through a hard time over the last few years, and there would be no buy­ers if it had tried to do a place­ment. The share price spike in Septem­ber – fu­elled by Mr Oei’s buy­ing – pre­sented an op­por­tu­nity.

“We needed money and within two days, we made the place­ment be­cause that was ac­tu­ally the best price we had got for the last two, three years,” said Mr Chew.

In his let­ter call­ing for an ex­tra­or­di­nary gen­eral meet­ing (EGM), Mr Oei had also asked that the iden­ti­ties of those who re­ceived stock in the place­ment ex­er­cise be dis­closed.

Mr Oei’s hos­til­ity comes as a sur­prise. The mar­ket had al­ways pre­sumed him and Mr Chew to be friends. Mr Oei’s mo­tives re­main un­clear but the place­ment di­luted his stake in the com­pany from 14.04 per cent to 12.88 per cent.

Long-time share­holder Mano Sab­nani sug­gested that the two big­wigs set­tle and avoid a “shoot-out” al­to­gether. He said: “Why don’t you just dis­close? You solve the prob­lem of try­ing to call another meet­ing. You’ve got to fo­cus now on mak­ing money for us, not on those things.”

Mr Chew said it was not his right to make the dis­clo­sure, adding that it rested on the peo­ple who had re­ceived the stock. “If I were to broad­cast, their con­fi­den­tial­ity could be in­volved,” he said.

Lead in­de­pen­dent di­rec­tor Henry Tan added: “I’m sure it’s also the chair­man’s de­sire to look at how we can reach an am­i­ca­ble so­lu­tion... We need to meet the lawyers very soon as well.”

Mr Sab­nani also called for the role of chair­man and CEO to be sep­a­rated. Mr Chew wears both hats.

“We share­hold­ers have told you in a friendly way. You didn’t lis­ten. Now some­one (Mr Oei) has used the span­ner and opened the box and said, do it... The cor­po­rate gov­er­nance code rec­om­mends strongly for the chair­man to be sep­a­rate. Do you agree or not?”

Mr Chew replied: “The code is a rec­om­men­da­tion.”

Raf­fles Ed­u­ca­tion’s share price surged four cents or 12.5 per cent to 36 cents yes­ter­day, on vol­ume of 30.3 mil­lion shares. It has a mar­ket cap of about $381.8 mil­lion, down from $2.6 bil­lion in 2008.

All AGM res­o­lu­tions were passed. A share pur­chase man­date to au­tho­rise the firm to buy up to 10 per cent of com­pany shares was re­newed with 56.22 per cent back­ing.

Raf­fles Ed­u­ca­tion is re­quired to con­vene an EGM no later than two months from Thurs­day.


A LIT­TLE MORE TIME Mr Chew Hua Seng said Raf­fles Ed­u­ca­tion needed fresh cash to fund ex­pan­sion, ac­cord­ing to peo­ple who were at yes­ter­day’s an­nual share­holder meet­ing.

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