Strange happenings at Smtrack

A rather perplexing boardroom battle is taking shape at loss-making Smtrack Bhd. The company that is principally involved in the provision of RFID solutions, received a notice from two shareholders requisitioning for an extraordinary general meeting (EGM) calling for changes in the board composition.

The two shareholders are Chung Kah Haur and Queck Han Tiong who claimed to hold more than 10% of the company’s shares. Smtrack received the notice on September 30.

On Oct 9, the company announced that after verification, the aggregate shareholding of both the shareholders did not exceed the required 10% to call for the EGM. Smtrack also stated that it would institute legal action on Chung and Queck.

On Oct 10, an interesting twist took place, The company announced that it had filed legal action against the duo preventing them from calling for an EGM. On the same day, Chung emerged as a substantial shareholder with 5.86% after having purchased 9.6 million Smtrack shares from the open market.

The developments clearly point to a boardroom battle taking place for the company that states its products are highly in demand due to its uniqueness and operation in an environment without much competition.

The company wants to move into other segments of the technology solutions market and hopes to increase its staff strength to diversify its income base. It wants to be a regional RFID solutions provider.

Smtrack may possibly have the potential to grow into a regional technology player.

However it is loss-making and obviously all is not well with its shareholders.

While the company has already taken legal action to stop the two shareholders or their agents from calling for an EGM, it is highly doubtful that this would be the end of the entire episode.

Surely there is more to come.