The Straits Times
www.straitstimes.com
Published on Oct 11, 2012
Grand Banks tussle ends in truce after failed bid to replace board
By jonathan kwok
PEACE could break out among the combatants at Grand Banks Yachts after a hostile bid to replace the board was defeated yesterday.
The vote was held during a lengthy meeting at Traders Hotel and ended with the investor who started the move leaving the door open to dialogue.
Substantial shareholder Peter Cheng Lim Kong shook hands with the Grand Banks directors, a scene that would have been unimaginable previously.
In July, Mr Cheng and fellow shareholder Kwah Yeow Khong demanded that the directors at the luxury boat maker be replaced by four of their own nominees, including Mr Cheng as executive director.
Their campaign led to yesterday's meeting, but not before a shadow war between both parties.
Grand Banks directors told shareholders last month that the power struggle had dampened staff morale and business confidence. They said Mr Cheng and Mr Kwah "had not given any rationale nor communicated with current directors and management to better understand the business and explain how they supposedly intend to improve and enhance the operations".
Mr Cheng took Grand Banks to court after a share placement to new investors last month diluted his and Mr Kwah's stakes before the meeting. On Tuesday, the High Court dismissed his application for the new shares to be denied voting rights at yesterday's meeting.
What promised to be an explosive affair at the 21/2-hour meeting turned out to be cordial and polite. Mr Cheng voiced his unhappiness that the new shares would carry votes but Grand Banks independent director Basil Chan said the firm had been seeking strategic investors since January.
The timing of the placement was a coincidence, said Mr Chan, adding that the new investors - theme park operator Koh Cheng Keong and Genting Group chairman Lim Kok Thay - could bring in new opportunities for Grand Banks.
Chairman Heine Askaer-Jensen highlighted steps the luxury boatmaker has taken to return to the black, such as introducing new boat designs.
Mr Cheng's resolutions were defeated at the meeting. He said he did not speak to the board members before the meeting as he was wary that things he said could be given a negative spin.
"But today after hearing me, checking my background, they all said they wanted to talk to me."
He said the directors were "very positive", and that "they all wanted to hear my ideas. I understand them and they understand me better now".
Mr Askaer-Jensen said the day was not about winning or losing: "Grand Banks can win in the longer run from the benefit of a constructive dialogue between shareholders and the board."
A retail shareholder who wanted to be known as Mr Low said the board "can say a lot of things, but actions speak louder than words". The 80-year-old retiree added: "Peter Cheng is also an unknown entity. Since he has some good ideas, it is good to co-opt him to work with the board for the good of the company."
Grand Banks has reported four years of losses. It is on the Singapore Exchange's watch-list, which means it has a time period to turn around its business or face possible delisting.
jonkwok@sph.com.sg
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