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					DEFINITIONS Except where the context otherwise requires, the following definitions shall apply throughout this Circular :“EGM” “General Mandate” : : Extraordinary General Meeting General Mandate pursuant to paragraph 10.09 of Chapter 10 of the Revamped Listing Requirements of the Bursa Malaysia and Practice Note No. 12/2001. : : : : : : Bursa Malaysia Securities Berhad (30632-P) The new Bursa Malaysia Listing Requirements as issued by the Bursa Malaysia on 22nd January 2001. Sin Heng Chan (Malaya) Berhad – Special Administrators Appointed The General Mandate Ringgit Malaysia recurring transactions of a revenue or trading nature in the ordinary course of business entered into by SHC which involves the interest, direct or indirect, of a related party. means a Director, major shareholder or person connected with such Director or major shareholder. For the purpose of this definition, “Director” and “Major Shareholder” shall have meanings given in paragraph 10.02. includes any person who is or was within the preceding 12 months of the date on which the terms of the transaction were agreed upon, a major shareholder of the listed issuer as defined under paragraph 1.01 (or any other company which is its subsidiary or holding company or a subsidiary of its holding company) Sin Heng Chan (East Coast) Sdn Bhd (SHCEC), Sin Heng Chan Feed Sdn Bhd (SHCF), Central Feedmill Sdn Bhd (CF), Goldkist Breeding Farms Sdn Bhd (GBF), Goldkist (NS) Sdn Bhd (GNS), Goldkist (Malaysia) Sdn Bhd (GM), Southern Farms Sdn Bhd (SF), Kuala Lumpur Feedmill Sdn Bhd (KLF), Ayam

“Bursa Malaysia” “the Listing Requirements” “SHC” “Proposal” “RM” “recurrent related party transactions”

“related party”

:

“major shareholder”

:

Subsidiaries

:

Segar Sdn Bhd (AS), and LKPP-Goldkist Sdn Bhd (LKPPG).

SIN HENG CHAN (MALAYA) BERHAD (Special Administrator Appointed) (Company No. : 4690-V) (Incorporated in Malaysia) REGISTERED OFFICE Level 3, Wisma E & C No. 2 Lorong Dungun Kiri Damansara Heights 50490 Kuala Lumpur Date: 7 June 2004 BOARD OF DIRECTORS Tuan Syed Omar bin Syed Abdullah (Chairman) Dato’ Choo Keng Weng (Managing Director) Y.M. Tunku Mahmood bin Tunku Mohammed (Independent Director) Ghazali bin Saiboo (Non-Independent Director) Venkata Chellam s/o Subramaniam (Independent Director) SPECIAL ADMINISTRATORS : Lim Tian Huat George Koshy To the Shareholders of SIN HENG CHAN (MALAYA) BERHAD Dear Sir/ Madam, SIN HENG CHAN (MALAYA) BERHAD (“SHC” OR “THE COMPANY”) PROPOSED RENEWAL AND ADDITIONAL SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE

1.

INTRODUCTION At the EGM on 26 June 2003, the Board obtained a mandate from the Company’s shareholders to undertake the Proposed Shareholders’ Mandate. The authority granted pursuant to the Proposed Shareholders’ Mandate shall, in accordance with the Listing Requirements, lapse at the conclusion of the forthcoming AGM unless the authority is renewed. On 7 June 2004, the Company made an announcement to KLSE that the Company would be seeking a renewal of mandate from its shareholders in respect of the Group’s recurrent related party transactions of a revenue or trading nature pursuant to Paragraph 10.09 of Chapter 10 of the Listing Requirements.

1

The Proposed Shareholders’ Mandate will take effect from the date of the passing of the Ordinary Resolution proposed at the EGM and is subject to annual renewal. In this respect, the mandate shall only continue to be in force until: (i) the conclusion of the first AGM of the Company following the EGM at which the Ordinary Resolution for the Proposed Shareholders’ Mandate is passed, at which time it will lapse unless the authority is renewed by a resolution passed at the meeting; the expiration of the period within which the next AGM after the date it is required to be held pursuant to Section 143(1) of the Companies Act 1965 (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Companies Act, 1965); or revoked or varied by resolution passed by the shareholders of the Company in a general meeting

(ii)

(iii)

whichever is the earlier. Disclosure will be made in the annual report of the Company of the aggregate value of transactions conducted pursuant to the shareholders’ mandate during the financial year and in the annual reports for the subsequent financial years during which a shareholders’ mandate for such transactions is in force. In making the disclosure of the aggregate value of such transactions in the annual report, a breakdown of the aggregate value of the recurrent transactions made during the financial year based on the type of transactions made and the names of the related parties involved in each type of recurrent transactions made and their relationship with the Company will be included. The Circular is prepared for the purpose to provide the shareholders of the Company with information on the Proposed Shareholders' Mandate and to seek your approval for the resolution to be tabled at the forthcoming EGM pertaining thereto. 2. DETAILS OF THE PROPOSED GENERAL MANDATE 2.1 Proposed General Mandate The Company hereby seeks a renewal of the mandate of the Shareholders of recurrent transactions of a revenue or trading nature, which are entered into in the ordinary course of business between the Group of the Company and certain directors and substantial shareholders of the Company and / or person connected to them are made at arms’ length, on SHC Group’s normal commercial terms and on terms not more favorable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders. Pursuant to subparagraph 10.09 (1) of the Listing Requirements, which came into effect on 1 June 2001, if approved at the EGM, the Proposed General Mandate is subject to annual renewal. In this respect, any authority conferred by the Proposed General Mandate shall only continue to be in force until: a) the conclusion of the first AGM of the Company following the forthcoming EGM at which such Proposed General Mandate was passed, at which time it will lapse, unless by resolution passed at an AGM whereby the authority is renewed; the expiration of the period within which the next AGM of the Company subsequent to the date it is required to be held pursuant to Section 143(1) of the Act (but shall not extent to such extension as may be allowed pursuant to Section 143 (2) of the Act);

b)

2

c)

revoked or varied by resolution passed by the shareholders in general meeting.

Whichever is the earlier. Approval from Shareholders will be sought for the renewal of the Proposed General Mandate at the next EGM and at each subsequent EGM of the Company, subject to satisfactory review by the Audit Committee of the Company of its continued application to the General Transactions. 2.2 The General Transactions The principal activities of the Company as investment holding company. Its subsidiaries are principally involved in manufacturing and trading of formulated animal feeds and broiler breeding. It is anticipated that the Group of the Company would, in the ordinary course of business, enter into transactions with the related parties as set out below. Effective Direct Subsidiary Companies Equity Interest @ 31/05/2004 Principal Activities Brand Name Sin Heng Chan (East Coast) Sdn Bhd (SHCEC) Goldkist (Malaysia) Sdn Bhd (GM) Southern Farms Sdn Bhd (SF) Ayam Segar Sdn Bhd (AS) 100% Manufacturing and Trading of formulated Animal feeds.

SHC / Red Circle

100% 100% 100%

Trading of formulated Tropi - Vite Mineral poultry products Tropi – Lyte Dormant Dormant

Sub-subsidiary Companies Of Sin Heng Chan (East Coast) Sdn Bhd

Effective Equity Interest @ 31/05/2004

Principal Activities Broiler breeding Trading of formulated Animal feeds Broiler breeding Dormant Dormant Dormant

Brand Name SHC / Red Circle -

Goldkist Breeding Farms Sdn Bhd (GBF) 94% Sin Heng Chan Feed Sdn Bhd (SHCF) LKPP – Goldkist Sdn Bhd (LKPPG) 100% 60%

Kuala Lumpur Feedmill Sdn Bhd (KLF) 100% Central Feedmill Sdn Bhd (CF) Goldkist (NS) Sdn Bhd (GNS) 100% 100%

3

The Directors and substantial shareholders of the Company who are parties to the Proposed General Mandate as at 31 May 2004 are as follow: Direct No. of SHC Shares held NIL Indirect No. of SHC % shares held NIL NIL

Director Tuan Syed Omar bin Syed Abdullah Dato’ Choo Keng Weng Y.M. Tunku Mahmood bin Tunku Mohammed Ghazali bin Saiboo Venkata Chellam s/o Subramaniam Note: * 2.3

%

NIL

54,000 NIL

0.21 NIL

5,508,000* NIL

29.00 NIL

NIL NIL

NIL NIL

NIL NIL

NIL NIL

Deemed interested by virtue of his 40% shareholding in Macronet Sdn Bhd.

Review Procedures for the General Transactions The General Transaction are conducted at arm’s length on commercial terms based on prevailing market prices which are no more favourable to the Parties to the Proposed General Mandate than those extended to the general public and are not to the detriment of the minority Shareholders. The Company will implement the following procedures to supplement existing internal procedures to ensure that the General Transactions are undertaken on arm’s length basis and on normal commercial terms: (i) Limits of authority Where the transaction is one with a value equal to or in excess RM1,000,000, it will be reviewed by the Audit Committee of the Company which will, if thought fit, recommend to the Board for approval. Where the transaction is one with a value below RM1,000,000, it need not be reviewed by the Audit Committee at the point contract is entered into but it must be tabled to the Audit Committee for review on a quarterly basis.

6

(ii)

Monitoring of the General Transactions To enable the Audit Committee to review and monitor the General Transaction, a report on the General Transaction will be made by senior management based on the price competitiveness of services or goods procured or provided under the Proposed General Mandate for the Audit Committee’s consideration. A register will be maintained by the Company to record all the General Transaction which are entered into pursuant to the Proposed General Mandate and will be available to the Audit Committee for its quarterly review. To ensure that such General Transactions are conducted at arm’s length and on normal commercial terms consistent with the Group’s usual business practices and policies and will not be prejudicial to Shareholders, the management will ensure that the General Transaction with the Parties to the Proposed General Mandate will only be entered into after taking into account the pricing, level of service, quality of product and other relevant factors. The Audit Committee of the Board may, if it considers necessary, instruct the internal auditor to carry out a review of any or all of the General Transaction to ascertain that the guideline and procedures established to monitor the General Transaction have been complied with. If a member of the Audit Committee has an interest, whether direct or indirect in a transaction to be reviewed by the Audit Committee, he would abstain from all deliberation and decision making by the Audit Committee in respect of such transaction. If during the periodic review, the Audit Committee is of the view that the abovementioned procedures are no longer sufficient to ensure that Recurrent Related Party Transactions are undertaken on an arm’s length basis and on normal commercial terms that are not more favourable to the related party than those normally available to the public, the Audit Committee shall have the discretion to request for additional procedures to be imposed on all Recurrent Related Party Transactions. In that event, such procedures may be implemented without the approval of shareholders, provided that they are more stringent than the existing procedures.

2.4

Audit Committee Statement The Audit Committee of the Company has seen and reviewed the procedures mentioned in Section 2.3 above and is of the view that the said procedures are sufficient to ensure that the General Transaction are not more favourable to the public and are not to the detriment of the minority Shareholders.

2.5

Rationale for and Benefit of the General Transactions The General Transactions are in the ordinary course of business of the Group and are on terms no more favourable to the Parties to the Proposed General Mandate than those generally available to the public. Except for the rental of premises and provision of management services that recur monthly, it is envisaged that transaction between the Group and the Parties to the Proposed General Mandate are likely to occur from time to time. The General Transactions with the Parties to the Proposed General Mandate are a part of the efforts to promote cross-selling and business opportunities within the Group of the Company which will be beneficial to all the companies within the Group of the Company. Cross selling between companies within the group ensures synergetic and optimum usage of facilities and staff located throughout the country.

7

The Proposed General Mandate, subject to annual renewal, will enhance the ability of the companies in the Group to pursue business opportunities, which are time sensitive in nature and will eliminate the need for the Company to announce and convene separate general meetings on each occasion to seek Shareholders’ prior approval for the General Transactions. This will substantially reduce the expenses associated with the convening of general meetings on an ad hoc basis, improve administrative efficiency and allow human resources and time to be channelled towards attaining corporate objectives. Disclosure shall be made in the annual report of the aggregate value of transactions conducted pursuant to the Shareholders’ mandate during the financial year. 3. CONDITION OF THE PROPOSED SHAREHOLDERS’ MANDATE The Proposed Shareholders mandate is conditional upon the approval of the shareholders of SHC being obtained at the forthcoming EGM. 4. DIRECTORS’ RECOMMENDATION Having considered the rationale and all relevant aspects of the Proposal, your Directors with the exception of Dato’ Choo Keng Weng and Venkata Chellam s/o Subramaniam are of the opinion that the proposed recurrent related party transactions is fair and reasonable and are in the best interest of SHC. Accordingly, your Board of Directors with the exception of Dato’ Choo Keng Weng and Venkata Chellam s/o Subramaniam recommend that shareholders vote in favour of all the relevant resolutions for the proposed recurrent related party transactions to be tabled at the forthcoming EGM of the Company. The interested directors, namely Dato’ Choo Keng Weng and Venkata Chellam s/o Subramaniam have abstained and will continue to abstain from all board deliberations and voting on the relevant resolution in respect of the Proposal. The interested major shareholder, namely Dato’ Choo Keng Weng has undertaken that he will abstain from voting in respect of their direct and /or indirect shareholdings in Sin Heng Chan (Malaya) Berhad on the Proposed Shareholders’ Mandate at the EGM to be convened. In addition, the interested directors and major shareholders have undertaken that they shall ensure that all persons connected with them, will abstain from voting in respect of their direct and/or indirect shareholdings in Sin Heng Chan (Malaya) Berhad on the Proposed Shareholders’ Mandate at the EGM. Save as disclosed above, none of the directors and/or major shareholder of Sin Heng Chan (Malaya) Berhad or persons connected with them has any interest, direct or indirectly in the Proposed Shareholders’ Mandate. 5. EXTRAORDINARY GENERAL MEETING For the purpose of approving the proposed recurrent related party transactions, an EGM, a notice of which is enclosed with this Circular, will be held at Dewan Berjaya, Bukit Kiara Equestrian & Country Resort, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur on 29th June 2004 at 3.00 p.m. You will find with this Circular, a Form of Proxy which (if you are unable to attend) you are requested to complete, sign and return in accordance with the instructions printed thereon as soon as possible to be deposited at the office of the Company’s Share Registrar, Level 3, Wisma E & C, No.2, Lorong Dungun Kiri, Damansara Heights, 50490 Kuala Lumpur, not later than forty-eight (48) hours before the time of convening the EGM. The completion and
8

lodgement of the Forms of Proxy will not, however, preclude you as shareholder from attending and voting in person at the EGM should you find that you are subsequently able to do so. Yours faithfully, For and on behalf of the Board of Directors of SIN HENG CHAN (MALAYA) BERHAD

SYED OMAR BIN SYED ABDULLAH Chairman

9

FURTHER INFORMATION 1. DIRECTORS’ RESPONSIBILITY This Circular has been seen and approved by the Board who collectively and individually accept full responsibility for the accuracy of the information given herein and confirm that after making all reasonable enquiries and to the best of their knowledge and belief, there are no other facts the omission of which would make any statement in this Circular misleading. 2. MATERIAL CONTRACTS Save as disclosed below, there are no material contracts, not being contracts entered into in the ordinary course of business, which have been entered into by SHC and /or its subsidiary companies during the two (2) years immediately preceding the date of this Circular: (i) SHCEC has executed a Letter of Intent with Kumpulan Pertanian Kelantan Berhad (KPKB) wherein SHCEC and KPKB agreed to enter into equity participation in Murni Hatchery Sdn Bhd (MHSB) for the funding of development costs of MHSB and the doing of such acts, matter and things which may be consistent with, necessary for or incidental to the attainment of MHSB’s objects. The shareholdings of SHCEC and KPKB in MHSB are as follows: KPKB SHCEC 70% 30% (with an option to increase to 40%)

The said Letter of Intent is not dated. However, SHCEC has passed a board resolution on 4 November 1998 approving the execution of the Letter of Intent by SHCEC; (ii) LKPP-G has entered into a Lease Agreement with Lembaga Kemajuan Perusahaan Pertanian Negeri Pahang (LKPP) in respect of the lease of all that piece of land held under P.N. 2553 Lot 1983 in the Mukim of Lepar, District of Pekan, State of Pahang for the purpose of developing and operating a poultry farm (parentstock farm) for a period of twenty-five (25) years commencing from 1 June 1998 and ending on 31 May 2023. The Lease rental payable by LKPP-G under the said Lease Agreement is as follows: (a) the amount of Ringgit Malaysia Two Thousand Five Hundred (RM2,500.00) only per acre for a total period of twenty five (25) years which is equivalent to the total sum of Ringgit Malaysia Five Hundred Nineteen Thousand Seven Hundred and Fifty (RM519,750.00) only; the amount of Ringgit Malaysia Ten (RM10.00) only per acre for the first year which is equivalent to the total sum of Ringgit Malaysia Thirty Thousand (RM30,000.00) only;

(b)

10

(c)

Annual tribute from the second year until the 25th year, at the rate of Ringgit Malaysia Thirty Thousand (RM30,000.00) only per year or at the rate shown below, whichever is the higher: (1) (2) (3) if the average net price per chick equal or exceed 80 sen, the annual tribute shall be 0.25 sen per chick; if the average net price per chick shall exceed 90 sen, the annual tribute shall be 0.375 sen per chick; if the average net price per chick shall exceed Ringgit Malaysia One (RM1.00) the annual tribute shall be 0.5 sen per chick.

(d) (e)

The lease rental stated under sub-paragraphs (a) and (b) above are payable upon the signing of the Lease Agreement. The annual tribute is payable on or before 30th October of each year and if the higher rate as stated in sub-paragraphs (c)(1), (2) or (3) is payable, the balance will be paid after the accounts of LKPP-G has been audited.

The said Lease Agreement is not dated. However, LKPP-G has passed a board resolution on 5 May 1998 approving the execution of the Lease Agreement by LKPP-G; (iii) On 28 June 2002, SHCEC has entered into two (2) Leasing Contracts with Bumiputra-Commerce Leasing Berhad (“BCLB”), the particulars of which are as follows: (A) Lease Agreement 1 BCLB agrees to let to SHCEC the following goods for the rents and upon the terms and conditions therein contained: (1) truck Nissan Diesel Model GVW Wheelbase Capacity Output Chassis No. Engine No. Regn No. (2) : PKD 211N (6x2) : 21,000 Kgs : 4500 mm : 6925 c.c. : 220 ps @ 2800 hpm : PKD211N-00148 : FE6-21-646C : CBF 9342

compartments mild steel bulk feed delivery tank 20 cu.m (706 cu.ft) two (2) compartments mild steel bulk feed delivery tank Chassis No. : 00148 Serial No. : HTK 061300

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The monthly rentals payable under Lease Agreement 1 are as follows: (a) the monthly rental of RM5,380.46 is payable on 28th day of each month during the 60 months primary period (i.e. from 28 June 2002 to 27 June 2007) the first monthly rental of which is payable on 28 June 2002; the monthly rental of RM1,315.00 is payable on 28th day of each month during the 12 months secondary period (i.e. from 28 June 2007 to 27 June 2008) the first monthly rental of which is payable on 28 June 2007; and the residuary value of the goods is RM10,520.00. Lease Agreement 2 BCLB agrees to let to SHCEC the following goods for the rents and upon the terms and conditions therein contained: (1) truck Nissan Diesel Model GVW Wheelbase Capacity Output Chassis No. Engine No. Regn No. (2) : PKD 211N (6x2) : 21,000 Kgs : 4500 mm : 6925 c.c. : 220 ps @ 2800 hpm : PKD211N-00149 : FE6-210650C : CBF 9420

(b)

(c) (B)

compartments mild steel bulk feed delivery tank 20 cu.m (706 cu.ft) two (2) compartments mild steel bulk feed delivery tank Chassis No. : 00149 Serial No. : HTK 061400

The monthly rentals payable under Lease Agreement 2 are as follows : (a) the monthly rental of RM5,380.46 is payable on 28th day of each month during the 60 months primary period (i.e. from 28 June 2002 to 27 June 2007) the first monthly rental of which is payable on 28 June 2002; the monthly rental of RM1,315.00 is payable on 28th day of each month during the 12 months secondary period (i.e. from 28 June 2007 to 27 June 2008) the first monthly rental of which is payable on 28 June 2007; and the residuary value of the goods is RM10,520.00;

(b)

(c) (iv)

SHCM had entered into the MOU with ASIH on 16 August 2002 in relation to the Restructuring Scheme except for the Disposals and MFSB Transfer;

12

(v)

SHCM, ASIH and DC had on 19 August 2002 entered into the Scheme Agreement whereby the parties have pursuant to the terms of the MOU agreed to implement a revised debt-restructuring scheme for SHCM in the manner and upon the terms and conditions therein contained subject to the approvals of all relevant authorities. SHCM, ASIH and DC had on 8 October 2003 entered into a Supplemental Agreement to the Scheme Agreement whereby the parties agreed to vary and revise certain terms and conditions of the aforesaid debt-restructuring scheme for SHCM in the manner and upon the terms and conditions set out therein.

(vi)

SHCM has entered into a sale and purchase of shares agreement dated 9 October 2003 with Ab Ghani Bin Mahmood (Ab Ghani) as the purchaser, whereby SHCM agreed to sell and Ab Ghani agreed to purchase 153,000 Shares in EFSB, representing 51% of the total issued and paid-up capital of EFSB, at a purchase consideration of RM1.00 to be paid on the execution of the sale and purchase of shares agreement and upon the terms and conditions therein contained, inter alia that the liabilities of EFSB as at 30 September 2003 amounting to RM721,000.00 shall be assigned to and be assumed by SHCM and the tax liabilities of EFSB as at 30 September 2003 amounting to RM42,875.53 shall be paid and settled by SHCM. As at 15 April 2004, the sale and purchase of EFSB Shares has been completed.

(vii)

SHCM has entered into a sale and purchase of shares agreement dated 9 October 2003 with Ab Ghani and Salim Bin Mohamed (the said Purchasers) as purchasers, whereby SHCM agreed to sell to the said Purchasers 1,000,000 Shares in UGSB, representing 100% of the total issued and paid-up capital of UGSB, at a purchase consideration of RM1.00 to be paid on the execution of the sale and purchase of shares agreement and upon the terms and conditions therein contained, inter alia that the liabilities of UGSB as at 30 September 2003 amounting to RM11,165,000.00 shall be assigned to and be assumed by SHCM. As at 15 April 2004, the sale and purchase of UGSB Shares has been completed.

(viii)

On 29 January 2004, SHCM has entered into a sale and purchase agreement (the SPA) with Leong Chun Peng (LCP) to dispose of all those pieces of land held under: (a) HS (M) 15 PT 21475 in the Mukim of Batu, District of Kuala Lumpur, State of Wilayah Persekutuan together with a two (2) storey shoplot erected thereon bearing postal address No. 80, Jalan Kepayang, Off Jalan Kuching, Taman City, 51200 Kuala Lumpur; and HS (M) 16 PT 21476 in the Mukim of Batu, District of Kuala Lumpur, State of Wilayah Persekutuan together with a two (2) storey shoplot erected thereon bearing postal address No. 79, Jalan Kepayang, Off Jalan Kuching, Taman City, 51200 Kuala Lumpur

(b)

for the purchase price of RM820,000.00 and upon the terms and conditions therein contained. The full purchase price of RM820,000.00 has been deposited by LCP with Messrs Chellam Wong as stakeholders upon the execution of the SPA.

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SHCM and LCP have subsequently acknowledged the letter from Messrs Chellam Wong addressed to SHCM and LCP to confirm their mutual agreement that the SPA dated 29 January 2004 above shall be further subject to SHCM obtaining the approval of the SC for the said disposal and upon the terms and conditions therein contained. The said approval was subsequently obtained from the SC on 19 February 2004 and accordingly the said disposal was completed on the even date. 3. MATERIAL LITIGATION Save as disclosed below, SHCM and/or its subsidiary companies are not engaged in any material litigation, claims and arbitration, either as plaintiff or defendant, which will have a material effect on the financial position of the SHCM Group. Save as disclosed below, the SA and Board of SHCM are not aware of any other proceedings pending or threatened against the SHCM Group or of any fact likely to give rise to any proceedings which might materially affect the position or business of the Group: 1. In 1994, SHCM commenced an action in Kota Kinabalu High Court under Suit No. K22-98-1994 against Hubong Jaya Enterprise Sdn Bhd as 1st defendant, Tan Siong Yong as 2nd defendant and Loo Teo Nyuk @ Loo Thau Nyuk as 3rd defendant for recovery of sum due for goods sold and delivered. Judgment in Default against all the defendants was obtained on 15 August 1994 for the sum of RM917,531.11 together with interest at the rate of 1% per month from 15 April 1994 until full payment and costs of RM225.00. The 1st defendant is insolvent and as at 15 April 2004, SHCM has not given instruction to the solicitors for further action against the 1st defendant. SHCM has commenced and completed bankruptcy proceeding against 3rd defendant. Receiving and Adjudication Orders were granted by High Court against the 3rd defendant on 13 October 1998 and Proof of Debt had been filed with the Official Assignee. The 2nd defendant had been adjudged a bankrupt by another judgment creditor and the Proof of Debt form has been filed with the Official Assignee. Messrs Shelley Yap Leong Tseu Chong Chia & Co., the solicitors for SHCM attending to the above matter are of the opinion that the chances of recovery of the debt are very slim. 2. By a Writ of Summons and Statement of Claim filed in Johor Bahru High Court on 25 June 1987, SHCM has initiated a legal action against Tan Joo Hoon under Suit No. 27-863 of 1987 for recovery of sum due for goods sold and delivered in the total sum of RM119,954.15. Judgment in default against the defendant was obtained on 12 August 1987 for RM119,954.15 together with interest and costs of RM225.00. The judgment obtained against the defendant is more than six (6) years and therefore, leave of the court is required to enforce the judgment. 3. In 1995, SHCM has commenced a legal action against Yong Keng Huing t/a Jelai Perusahaan Ayam Dan Pemborong in Melaka High Court vide Suit No. 22-351995 to recover the sum due for goods sold and delivered in the total amount of RM336,000.00. Consent Judgment was entered on 11 December 1996.

14

Part of the judgement sum has been paid to SHCM leaving a balance of RM97,000.00 outstanding as at 15 April 2004. The Directors of SHCM are of the opinion that the chance of recovery of the debt is fair. 4. On 4 June 1996, SHCM filed a legal action against Chan Kok Chu t/a Hoe Huat Poultry Farm in Melaka Session Court vide Melaka Sessions Court Summons No. 52-150-1996 to claim for balance of payment due for goods sold and delivered in the total sum of RM165,552.85. Consent Judgment was entered on 27 September 1996. However, no payment was made by the defendant thereafter. The solicitors handling the matter, Messrs Mohd Latip & Associates have filed Bankruptcy Notice against the defendant. The defendant is making regular repayment to SHCM (five (5) post-dated cheques of RM2,000.00 dated 20 March 2004 to 20 July 2004 in hand). The total debt due and outstanding to SHCM as at 15 April 2004 is RM84,552.85 and the Directors of SHCM are of the opinion that the chance of recovery of the debt is fair. 5. SHCM commenced a legal action against Li Ong Heng Farm Sdn Bhd in 1996 in Batu Pahat Session Court under Summons No. 52-27/96 for recovery of sum due for goods sold and delivered in the total amount of RM197,063.20. Consent Judgment dated 19 February 1997 was obtained against the defendant for the sum of RM197,063.20. The defendants were paying the judgment sum initially but defaulted subsequently. The solicitors for SHCM, Messrs S.K. Khoo & Tan Tian Tiok, proceeded with the bankruptcy proceedings against the guarantor, Tay Cheng Khian in Johor Bahru High Court and filed the Creditor’s Petition. The said solicitors were not able to serve the Creditor’s Petition on the defendant personally and had applied for and obtained an Order to serve the Creditor’s Petition by substituted service on 28 March 2000. An Order was filed in the Johor Bahru High Court soon after. However the said solicitors only received the fair copy of the Order from the Court on 15 June 2002. Further costs will be incurred should SHCM wishes to continue with the matter. The total debt due and outstanding as at 15 April 2004 is RM137,063.20. The Directors of SHCM are of the opinion that as Li Ong Heng Farm Sdn Bhd has been wound up, the recovery prospects is poor. 6. SHCM initiated a legal action against Heng Weng Chin t/a Syarikat Oriental Pengeram Ayam in 1995 under Melaka Session Court Summons No. 52-155/95 to recover the sum due by the defendant to SHCM for goods sold and delivered up to a total of RM161,649.68. Judgment against the defendant was obtained on 11 April 1997 after full trial. SHCM subsequently filed the Creditor’s Petition on 11 April 2000 and the hearing of the Creditor’s Petition was held on 12 July 2000. The Adjudication and Receiving Orders against the Judgment Debtor was obtained on 5 January 2001 and the Proof of Debt was filed on 26 July 2001. The total debt due and outstanding as at 15 April 2004 is RM161,649.68. The Directors of SHCM are of the opinion that since Heng Weng Chin has been made a bankrupt by SHCM, the recovery prospect is poor.

15

7.

In 1993, SHCM commenced a civil suit against Liew Sin @ Liew Kim Chai, Low Kim Jon, Low Kim Hock t/a Soon Long Farm Brothers Company in Melaka High Court for recovery of sum due for goods sold and delivered in the total sum of RM192,593.20. The Suit No. for the case is Melaka High Court Civil Suit No. 22-41/93. Judgment in default against all defendants was obtained on 29 April 1995 for RM192,593.20 together with interest at the rate of 8% per annum and costs. Bankruptcy Notice has been filed at Johor Bahru High Court but was expired when it was returned by the Johor Bahru High Court to the solicitors of SHCM, Messrs S.K. Khoo & Tan Tian Tiok. The said solicitors then filed Applications to extend the time allowed for service of the Bankruptcy Notices and also to serve the Bankruptcy Notices by substituted service. However the Orders were returned to the said solicitors late by the Johor Bahru High Court. The solicitors have gone through this whole process twice and have written to SHCM on 5 November 2001 to request for further disbursements. As there is no further instructions or remittance from SHCM, the solicitors have not proceeded any further. The Judgment obtained against the defendants has lapsed as it is more than six (6) years since the date of the Judgment. Leave of court is required to execute the Judgment against the defendants. Messrs S.K. Khoo & Tan Tian Tiok do not advise proceeding any further as they have had great difficulty extracting documents from the Johor Bahru High Court.

8.

In 1996, SHCF has instructed its solicitors, Messrs Taye & Co. to institute an action against Wong Loi who stood as guarantor for Fadzlullah Enterprise in respect of a claim for RM869,412.94. However, the defendant was adjudged a bankrupt on 13 June 1984 vide Johor Bahru High Court Bankruptcy No. 43-126 tahun 1983 (01) and hence no action was filed in court against him. The Proof of Debt Form has been lodged with Assistant Official Assignee. The solicitors for SHCF have closed their file for this matter as they have no further instructions from SHCF. The total debt due and outstanding as at 15 April 2004 is RM869,412.94. The Directors of SHCF are of the opinion that since Wong Loi is already a bankrupt, the chance of recovery is poor.

9.

SHCEC commenced a civil action in 1996 against Wimie Poultry Farm Sdn Bhd in Kuantan Sessions Court vide Kuantan Sessions Court Civil Action No. 52134-1996 for recovery of sum due for goods sold and delivered in the total sum of RM168,367.60. SHCEC has subsequently commenced bankruptcy actions against the three guarantors of Wimie Poultry Farm Sdn Bhd, namely Azman Bin Mat Wajib, Azaha Bin Abdullah and Khairul Annuar Zulkifli in 1997 and 1998 respectively vide (i) Kuantan High Court Bankruptcy No. 29-88-1997 (Khairul Annuar Zulkifli); (ii) Kuala Terengganu High Court Bankruptcy No. 29-158-1998 (Azaha Bin Abdullah); and (iii) Kuantan High Court Bankruptcy No. 29-5361998 (Azman Bin Mat Wajib).

16

The solicitors for SHCEC, Messrs Lin & Associates has proceeded with Creditors Petition against Azman Bin Mat Wajib and the same is pending the fixing of hearing date thereof by the court. In the bankruptcy proceedings against Azaha Bin Abdullah and Khairul Annuar Zulkifli respectively, the solicitors have lodged the Proof of Debt and General Proxy with the Official Assignee and the same is pending the Official Assignee to fix a date for the 1st creditors’ meeting. The total debt due and outstanding as at 15 April 2004 is RM161,621.10. The Directors of SHCEC are of the opinion that SHCEC is unlikely to recover the debt as the defendant has ceased trading. Although actions against guarantors have been taken, the chances of recovery against guarantors are very poor. 10. SHCEC has instituted a civil action against Wan Hitam Bin Abd. Rahman in Kuantan Sessions Court under Civil Action No. 52-26-2000 for recovery of sum due for goods sold and delivered in the total amount of RM137,694.10. Consent judgment was recorded on 20 April 2000. The total debt due and outstanding as at 15 April 2004 is RM133,681.60. The Directors of SHCEC are of the opinion that the chance of recovery of debts is very poor as the defendant has ceased operations. 11. In 1998, SHCEC has commenced a civil action against Abdul Rashid Bin Lebai Mat Amin in Kuantan Sessions Court under Civil Action No. 52-1198-1998 for recovery of sum due for goods sold and delivered in the total sum of RM126,826.96. Subsequently, SHCEC instituted bankruptcy proceedings against the defendant in Kuala Terengganu High Court under Bankruptcy No. 29978-1999. The solicitors for SHCEC has been instructed by SHCEC to keep the matter in abeyance until further notice. The bankruptcy proceeding against the defendant has since been withdrawn with liberty to file afresh. The total debt due and outstanding as at 15 April 2004 is RM79,838.61. The Directors of SHCEC are of the opinion that the chance of recovery of debts is fair as the defendant is still operating. 12. SHCEC commenced a civil action against Chua Guan Hing t/a Ladang Ternakan Guan Hing in 1998 in Kuantan Sessions Court under Civil Action No. 52-11991998 for recovery of sum due for goods sold and delivered in the total amount of RM172,927.93. Judgment against the defendant has been obtained by SHCEC on 11 November 1998. The defendant is paying about RM250.00 monthly to SHCEC and the total debt due and outstanding as at 15 April 2004 is RM152,327.93. There is a charge created by the defendant in favour of SHCEC over the property held under Title No. H.S.(M) 532 P.T. No. Lot 1697 in the Mukim of Tembila, District of Besut, State of Trengganu vide charge Presentation No. 719/88 Jilid 4 Folio 12 and registered on 20 June 1988 as security for payment. SHCEC has instructed its solicitors to keep the matter in abeyance until further notice.
17

The Directors of SHCEC are of the opinion that the chance of recovery of debts is fair as the defendant is still operating. 13. In 1998, SHCEC commenced a civil suit against Syarikat Perniagaan Perternakan Sing Seng in Kuantan High Court under Civil Suit No. 22-79-98 for recovery of sum due for goods sold and delivered in the total sum of RM431,031.05. Subsequently, SHCEC instituted bankruptcy proceedings against Fok Mui Keow who stood as guarantor for the defendant in Kuantan High Court under Bankruptcy No. 29-722-1999. Bankruptcy Notice has been duly registered and returned from the High Court, Kuantan and the solicitors of SHCEC have served the Bankruptcy Notice on the guarantor. As the guarantor is already a bankrupt, the solicitors for SHCEC are currently waiting for the Official Assignee to fix a date for the 1st creditors’ meeting. The Directors of SHCEC are of the opinion that the chance of recovery is poor as the guarantor is a bankrupt and has ceased trading. 14. SHCEC commenced a civil suit in Kuantan High Court against Chan Fook Theen @ Chan Hon Weng t/a Chun Sung Agriculture & Poultry Farm under Kuantan High Court Civil Suit No. 22-78-1998 for recovery of sum due for goods sold and delivered. The claim involved a total sum of RM276,300.00. Judgment against the defendant was obtained on 24 December 1998. The Directors of SHCEC are of the opinion that the chance of recovery of debts is poor as the debtor has ceased operations. 15. SHCEC initiated a civil action against Chan Sau Ying t/a Syarikat Perniagaan Ban Swee Heng in 1998 under Kuantan High Court Civil Suit No. 22-77-1998 to recover sum due for goods sold and delivered up to the total sum of RM385,163.76. Judgment against the defendant was obtained on 11 December 1998. The solicitors for SHCEC are waiting for further instruction from SHCEC to proceed further. The total debt due and outstanding as at 15 April 2004 is RM296,687.14. The Directors of SHCEC are of the opinion that the chance of recovery of debt is poor as the defendant cannot be traced. 16. In 1996, SHCM instituted a legal action against Khew Moi in Melaka High Court under Suit No. 24-93-1996 seeking an order to foreclose a property charge to SHCM pursuant to a third party charge as security for goods sold and delivered for the sum of RM150,000.00. Form 16E has been issued to the Chargor on 26 April 2002 and SHCM has commenced foreclosure proceedings against the Chargor. Notice of Taxation fixed for mention on 16 August 2004. The solicitors for SHCM, Messrs Chellam Wong are of the opinion that SHCM should be able to recover the debt substantially or in full as there is a duly registered 3rd party charge in favour of SHCM.
18

17.

In 1997, SHCEC instituted a legal action against Ong Phaik Lian in Penang High Court under Suit No. 22-353-1997 for dishonoured cheque issued for payment of debt due and payable by Teh Hock Guan t/a Chip Seng Chan to SHCEC. Judgment for the sum of RM345,365.49 with interests and costs against the defendant was obtained on 17 January 1998. Subsequently, SHCEC re-filed bankruptcy proceedings against the defendant on 12 June 2001 under Penang High Court, Bankruptcy No. 29-1535-2001 for RM453,609.46 SHCEC has accepted the defendant’s settlement offer of RM168,000.00 payable by 48 monthly instalments of RM3,500.00 each commencing 1 October, 2003. The total debt due and outstanding as at 15 April 2004 is RM321,533.66. The Company received a cheque dated 31 March 2004 for the amount of RM3,500.00. There are two (2) post-dated cheques of RM3,500.00 each dated 30 April and 30 May 2004 in hand. The solicitors for SHCEC are of the opinion that the outcome of the matter is favourable.

18.

In 1996, Central Feedmill Sdn Bhd (CF) instituted a legal action against Gan Kheng Huat in Kuala Lumpur Session Court under Summons No. 52-644-97 (431155-1996) to recover the sum due for goods sold and delivered in a total sum of RM160,080.02. The defendant has been made a bankrupt and the solicitors for CF have filed the claim with the Official Assignee and are currently waiting for the Creditor’s Meeting to be fixed. The solicitors for CF have written to the Official Assignee at Shah Alam on a few occasions for the date of the creditors meeting and are waiting for reply. The Directors of CF are of the opinion that the collection is difficult as the debtor cannot be traced.

19.

SHCM has commenced a legal action against Cheng Boon Tiong (trading as Lian Hup Poultry) in Kuala Lumpur Session Court under Summons No. 3-52-5938-96 (29-75-1997(09)) to recover the sum due from the defendant for goods sold and delivered in a total sum of RM137,500.50. Proof of Debt form was filed with the Official Assignee at Muar, Johor on 25 February 2000 and SHCM is currently waiting for the Creditor’s Meeting to be fixed. The Directors of SHCM are of the opinion that the collection is difficult as the debtor cannot be traced.

20.

On 28 July 1997, Sin Heng Chan (Butterworth) Sdn Bhd (SHC(BW)) has issued a letter of demand through its solicitors to Tong Yang Animal Feeds Supplier for payment of outstanding sum due to SHC(BW) for goods sold and delivered in the sum of RM292,327.89.

19

After the disposal of SHC (BW) by SHCM, the legal case was transferred to SHCEC Butterworth Branch (SHCEC/BW). SHCEC/BW has instructed its solicitors not to proceed with further legal action. The Directors of SHCEC/BW are of the opinion that the chance of recovery is poor as the defendant had ceased operations and cannot be traced. 21. SHCEC has issued a Letter of Demand to P.W. Lian Ying Trading Sdn Bhd on 2 September 1997 to pay the outstanding sum in the total of RM100,640.16 to SHCEC as debt due for goods sold and delivered. However, SHCEC has subsequently instructed its solicitors not to proceed with further legal action. As such, its solicitors have closed their file. The Directors of SHCEC are of the opinion that SHCEC is not able to collect the debt as the debtor had ceased trading and untraceable. 22. In 1998, SHCEC made an Ex-Parte application under Kuala Terengganu High Court, Bankruptcy No. 29-583 of 1998 against Wan Musa Bin Wan Embong t/a Razak Enterprise to declare the defendant bankrupt on the ground that the defendant is indebted to SHCEC in a total sum of RM302,748.96 as payment due for goods sold and delivered. The total debt due and outstanding as at 15 April 2004 is RM209,963.27. The solicitors for SHCEC are in the midst of filing an application to the Court for leave to file Creditor’s Petition out of time. The Directors of SHCEC are of the opinion that the chance of recovery of debt is poor as the defendant has ceased trading and untraceable. 23. On 13 February 2000, SHCEC ex-parte filed a Bankruptcy Notice in Kuala Terengganu High Court, Bankruptcy No. 29-155 of 2000 against Abdul Razak Bin Ismail t/a Razak Enterprise to declare the defendant bankrupt on the ground that the defendant is indebted to SHCEC in a total sum of RM325,763.95 being payment due and payable by the defendant to SHCEC for goods sold and delivered. The total debt due and outstanding as at 15 April 2004 is RM209,963.27. The solicitors for SHCEC cannot serve the Bankruptcy Notice on the defendant as the defendant cannot be located. The solicitors have obtained an order to serve the Bankruptcy Notice by way of substituted service and are waiting for SHCEC’s instruction to proceed further. The Directors of SHCEC are of the opinion that SHCEC is not able to collect the debt as the debtor had ceased trading and untraceable. 24. In 1997, SHCS instituted a legal action in Kuala Lumpur High Court, vide Suit No. D1-22-1438-1997 against SHCM. SHCS’s claim is for USD465,814.82 for supply of raw material, SDR185,457.13 being costs of management information and RM6,358,664.09 for feed milling technical services as at 30 June 1999. SHCM denied owing the amount claimed and has filed a counter claim against SHCS and 6 others for a sum in excess of RM200,000,000.00 on the basis that the Plaintiff conspired with the other parties through “structured relationship of ownership and control and management” to cause economic and financial loss to SHCM. In short, SHCM claimed that all transaction carried out by the
20

representatives of the Plaintiff and the other parties were not on arms length, were to the detriment of SHCM and were for the unlawful benefit of the Plaintiff itself. The common directors also failed to disclose their interest. The solicitors for SHCM then filed an application for leave to serve the Statement of Defence and Counterclaim on 6 other parties mentioned above out of jurisdiction. The necessary orders have been obtained on 11 December 2003 and the solicitors for SHCM is currently in the midst of effecting service of the defence and counter-claim on all parties identified therein. The solicitors for SHCM, Messrs Sri Ram & Co. are of the view that SHCM can sustain the counterclaim against the Plaintiff because there are sufficient issues raised in the defence to defend the claim. There are also documents which support the arguments raised by SHCM. 25. In 1997, SHCS commenced an action against SHCEC in Kuala Lumpur Sessions Court under Suit No. 7-52-9833-97 for USD7,427.64 and SDR64,190.67 which claim is for the supply of raw material and costs of management information and feed milling technical services respectively. SHCEC has filed a counterclaim in excess of RM21.0 million. The counter claim in this suit is on the basis that SHCS and 6 other parties through a “structured relationship of ownership, control and management” caused economic and financial loss to SHCEC. In short, SHCEC claims that all the transactions carried out by the representatives of SHCS and the 6 other parties mentioned in the counter claim were not done at arms length and was carried out to the detriment of SHCEC for the unlawful benefit of SHCS itself. SHCEC further claims that the Directors who were common directors failed to disclose their interest. SHCEC has then filed a originating summons against SHCS in Kuala Lumpur High court, Summons No. S6-24-687-1999 for the sole purpose of transferring the action filed by SHCS to the High Court. An order in terms of the application to transfer the proceedings from the Sessions Court to the High Court was granted on 22 July 1999 and the case was transferred to Kuala Lumpur High Court under a new case number Kuala Lumpur High Court Suit No. S3-22-482000. On 16 March 2001, the solicitors obtained an order for leave to serve the Defence and Counterclaim on the 2nd to 6th Defendants in the Counterclaim out of jurisdiction. The 4th Defendant in the Counterclaim applied to set aside the service of the Defence and Counterclaim. The solicitors for SHCEC successfully opposed the said application. This matter is now fixed for Case Management on 23 August 2004 before the Judge. The solicitors for SHCEC, Messrs Sri Ram & Co. informed that there are sufficient issues raised in the defence to defend the claim. There are also documents which support the arguments raised by SHCEC. Thus, the said solicitors are of the view that SHCEC can sustain the counterclaim against SHCS.

21

26.

In 1997, SHCS commenced a legal action against CF in Kuala Lumpur High Court under Suit No. D1-22-1439-1997 to claim for supply of raw material (USD4,213.00) and costs of management information (SDR37,256.04) and feed milling technical services (RM2,671,359.65). Judgment in default was obtained against CF. An application to set aside the Judgment in default was filed. The solicitors for CF have successfully set aside the Judgment in default on 30 October 2001. The solicitors for CF prepared and filed an application for leave to serve the Defence and Counterclaim of CF out of jurisdiction. The necessary orders have been obtained to effect service of the defence and counterclaim as the parties mentioned in the counter-claim that are out of jurisdiction. The solicitors for CF, Messrs Sri Ram & Co. informed that the defences which will be raised here, are the same as those in the other suits brought by SHCS against SHCM and SHCEC. The said solicitors’ views therefore are the same.

27.

In 1997, SHCS also commenced a legal action against SHC/BW in Penang High Court under Suite No. 22-184-1997 to claim for supply of raw material (USD146,580.09) and costs of management information and purchasing commission (SDR388,703.91). SHCS’s application for summary judgment was allowed on 24 March 2000 and SHC/BW appealed to the Judge in chambers. The appeal was allowed. The solicitors for SHC/BW have obtained an order for leave the serve the Defence and Counterclaim on the 2nd to 6th Defendants in the Counterclaim out of jurisdiction. The 4th Defendant in the Counterclaim, has filed an application to set-aside the service of the Counterclaim. The hearing of the 4th Defendant’s application to set aside the service of the Counterclaim which was fixed on 2 August 2002 was adjourned and was fixed for hearing on 13 September 2002. No new dates has been set. The solicitors for SHC/BW, Messrs Sri Ram & Co. informed that the defences which will be raised here, are the same as those in the other suits brought by SHCS. The said solicitors’ views therefore are the same.

28.

In 2002, SHCM brought an action against Lee Long Trading Co. in Johor Bahru High Court under Suit No. 22-203-2002 for a sum of RM353,846.62 being debt due for goods sold and delivered. The solicitors for SHCM have served the Writ on the defendant. The defendant has applied to strike out the writ. The solicitors for SHCM, Messrs Chellam Wong are preparing application for summary judgment. SHCM is receiving irregular payments from the defendant. The solicitors for SHCM are of the view that the chance of recovery is fair.

22

29.

In 1997, SHCM instituted a legal action against Lian Hin Trading in Kuala Lumpur Sessions Court under Suit No. 9-52-1090-97 for a sum of RM229,490.36 as debt due for goods sold and delivered. Judgement has been obtained against the defendant. The solicitors for SHCM are of the view that the chance of recovery of the judgement sum is fair.

30.

SHCM commenced an action against Seng Kia Poultry Farm in 1999 in Shah Alam High Court under Suit No. MT3-22-871-1999 to recover a total sum of RM486,232.86 being debt due for goods sold and delivered. Judgment against the defendant was obtained on 30 December 1999. SHCM have instructed its solicitors to keep this matter in abeyance until further notice from SHCM as there have been some payment received from the defendant. The total debt due and outstanding as at 15 April 2004 is RM463,732.66. The Company received a cheque dated 29 March 2004 for the amount of RM500.00. There are three (3) post-dated cheques of RM500.00 each dated from 29 April 2004 to 29 June 2004 in hand. The solicitors for SHCM, Messrs Chellam Wong are of the view that since the defendant is making irregular payments, the chances of recovery are fair.

31.

SHCM has a claim against Ayam N.S. Sdn Bhd for RM1,760,309.08 being debt due for goods sold and delivered. However, no action has been taken in court as the defendant has been wound up. SHCM has filed the Proof of Debt with the relevant Official Receiver. The solicitors for SHCM are of the view that since the defendant’s company has been wound up, SHCM is waiting for distribution of the defendant’s assets by the Official Receiver.

32.

SHCM instituted a legal action against Permas Marketing in 1997 in Kuala Lumpur Sessions Court under Suit No. 52-1089-1997 for a total sum of RM138,899.95 being debt due for goods sold and delivered. Judgment was granted in favour of the defendant and SHCM is appealing against the judgment granted. The solicitors for SHCM, Messrs Chellam Wong are of the view that the chance of recovery is poor as the court decision was made against SHCM.

33.

In 1998, Asia Commercial Finance (M) Bhd brought a legal action against SHCM who stood as the guarantor for hire purchase facility granted to EFSB in Kuala Lumpur Sessions Court under Suit No. 5-52-23863-1998 for a total sum of RM229,637.27. The matter has been fixed for full trial on 18 May 2004. The solicitors for SHCM, Messrs Chellam Wong advised that SHCM’s chance of success is poor and in the event SHCM is unsuccessful, SHCM will settle the debts on implementation of the Restructuring Scheme.

23

34.

SHCF has issued a Letter of Demand to Pertanian Tani Jaya Sdn Bhd to demand for repayment of a sum of RM365,864.00 as payment due for goods sold and delivered. SHCF will proceed to issue summons against debtors and guarantors since the defendent is making irregular payment. The total debt due and outstanding as at 15 April 2004 is RM65,000.00. The solicitors for SHCF, Messrs Chellam Wong are of the opinion that SHCF has good chance of recovery.

35.

In 2002 by a Summons filed with Johor Bahru High Court under Suit No. MT422-202-2002, SHCF commenced a legal action against Kim Soon Poultry Sdn Bhd and 3 others for a sum of RM293,500.00 being payment due for goods sold and delivered. The Summons has been returned by the Court and the solicitors for SHCF are to attend to personal service of the said Summons on the defendants. The solicitors of SHCF is in the process of refiling the writ of summons as the previous writ has expired. The debtor has ceased business. The solicitors for SHCF, Messrs Chellam Wong are of the view that the recovery against the debtor would be difficult. However, the case against the guarantors will be fair.

36.

SHCF commenced a legal action against Lim Tian Sing Farm Sdn Bhd in Melaka Sessions Court under Suit No. (2)-52-682-2000 in 2000 for a sum of RM237,549.57 being payment due for goods sold and delivered. The defendant has filed defence. Affidavit in reply filed by SHCF and SHCF also applied for Summary Judgment. Consent Judgment was entered on 5 August 2002. SHCF will proceed with bankruptcy proceedings. The total debt due and outstanding as at 15 April 2004 is RM196,349.57. The solicitors for SHCF are of the view that SHCF’s chance of recovery of the debt is good.

37.

On 24 April 2002, SHCF filed a Summons with Johor Bahru Sessions Court under Suit No. 52-1785-2002(2) to commence a legal action against Fairchick Farming Sdn Bhd for a sum of RM150,125.50 as debt due for goods sold and delivered. The debtor has made payments to SHCF. Consent Judgement was recorded on 21 August 2002. The total debt due and outstanding as at 15 April 2004 is RM45,125.50. The solicitors for SHCF, Messrs Chellam Wong are of the opinion that the chance of recovery is good.

24

38.

SHCF has a claim against Ayam N.S. Sdn Bhd for the sum of RM236,020.00 being debt due for goods sold and delivered. As the debtor has been wound up, no legal action has been taken but Proof of Debt has been filed with the relevant Official Receiver. The solicitors for SHCF, Messrs Chellam Wong are of the opinion that since the debtor has been wound up, SHCF has to wait for the distribution of the debtor’s assets by the Official Receiver.

39.

In 2001, SHCF instituted a legal action against Aspirasi Tetap Sdn Bhd in Shah Alam High Court under Suit No. MT1-22-557-2001 for the sum of RM360,000.00 as debt due for goods sold and delivered. SHCF has applied for Summary Judgment against the defendant and awaiting for hearing date. Commenced foreclosure proceedings against 3rd party chargor. The solicitors for SHCF, Messrs Chellam Wong are of the view that SHCF has good chance of success in this matter.

40.

CF commenced a legal action against Chai Fa Fui in 1997 in Kuala Lumpur Sessions Court under Suit No. 7-52-8919-97 for the sum of RM159,695.80 being debt due for goods sold and delivered. The Court’s file was transferred and unfortunately the Registry is currently unable to locate the file. The court is in the process of reconstructing the file. The total debt due and outstanding as at 15 April 2004 is RM149,195.80. Notwithstanding the above, the solicitors of CF, Messrs Chellam Wong are of the view that there is a good chance of recovery of its debt as the defendant is still operating.

41.

On 3 September 1998, SHCEC has commenced a civil suit against Goh Choon Poo and Goh Sun Ten both trading as Sin Guan Soon in Kuantan High Court under Civil Suit No. 22-57-2001 for the sum of RM523,814.00 being debt due for goods sold and delivered. SHCEC has applied for Summary Judgment and the defendant has applied to strike out the claim. The matter is now fixed for continued hearing of case management on 5 July 2004. The Directors of SHCEC are of the opinion that the chance of recovery of debt is poor.

42.

On 20 March 1996, SHC/BW has commenced a legal action against Tai Huat Chan Trading Co. (sue as a firm) in Penang High Court under Suit No. 22-143-92 for the sum of RM487,234.46 as debt due for goods sold and delivered. Upon the disposal of SHC/BW by SHCM, this legal matter has been transferred to SHCEC/BW. Judgment has been obtained against the defendant for the sum of RM487,234.46 with interest and costs. SHCEC/BW has filed bankruptcy proceedings against Chou Cheng Joo (as partner of Tai Huat Chan Trading Co.) on 20 March 1996 under Penang High Court, Bankruptcy No. 29-205-96 for RM666,109.58. Debtor was adjudicated bankrupt on 17 January 2002.SHCEC/BW also filed bankruptcy proceedings against Cheow Cheng Hua (as partner of Tai Huat Chan Trading Co.) on 20
25

March 1996 under Penang High Court Bankruptcy No. 29-207-96 for RM666,109.58. Debtor was adjudicated bankrupt on 27 January 2000. SHCEC/BW also filed bankruptcy proceedings against Choo Cheng Sun (as partner of Tai Huat Chan Trading Co.) on 20 March 1996 under Penang High Court Bankruptcy No. 29-206-96 for RM666,109.58. The matter was withdrawn on 13 January 1997 as the debtor was already adjudicated bankrupt under a separate action (Case No. 43-996-94) on 22 July 1996. The Directors of SHCEC/BW are of the opinion that SHCEC/BW is not able to collect the debts as the debtor is no longer trading and untraceable. 43. In 1995, SHC/BW commenced a legal action against Auntat Farm Enterprise Sdn Bhd in Penang High Court under Suit No. 22-273-95 for a sum of RM332,063.85 as debt due for goods sold and delivered. Upon the disposal of SHC/BW by SHCM, this legal matter has been transferred to SHCEC/BW. The solicitors were instructed by SHCEC/BW to withhold action on 15 October 1996 pending settlement and did not proceed with the matter. 44. SHC/BW instituted a legal action against Pah Song Hong & 4 others t/a Song Teik Brothers Farming in 1999 in Penang High Court under Suit No. 22-154-99. SHC/BW claimed a sum of RM2,365,437.83 against the defendants as debt due for goods sold and delivered. Upon the disposal of SHC/BW by SHCM, this legal matter has been transferred to SHCEC/BW. Judgment against the defendants was obtained for RM2,365,437.83 with interest and costs. SHCEC/BW filed Bankruptcy proceedings against Pah Song Hong under Penang High Court Bankruptcy No. 29-1276-2002 on 15 May 2002 for RM1,835,000.00. The said proceedings was later discontinued and new bankruptcy proceeding was re-filed against Pah Song Hong under Penang High Court Bankruptcy No. 293058-2003 on 7 October 2003 for RM1,785,000.00 The solicitors for SHCEC/BW are in the process of filing the Creditor’s Petition. SHCEC/BW also filed Bankruptcy proceedings against Pah Boon Weng under Penang High Court Bankruptcy No. 29-1279-2002 on 15 May 2002 for RM1,835,000.00. The said proceedings was later discontinued and new bankruptcy proceeding was re-filed against Pah Song Hong under Penang High Court Bankruptcy No. 29-3059-2003 on 7 October 2003 for RM1,785,000.00. The solicitors for SHCEC/BW are in the process of filing the Creditor’s Petition. SHCEC/BW also filed Bankruptcy proceedings against Pah Siong Huat under Penang High Court Bankruptcy No. 29-1275-2002 on 15 May 2002 for RM1,835,000.00. The said proceedings was later discontinued and new bankruptcy proceeding was re-filed against Pah Song Hong under Penang High Court Bankruptcy No. 29-3060-2003 on 7 October 2003 for RM1,785,000.00. The solicitors for SHCEC/BW are in the process of filing the Creditor’s Petition. SHCEC/BW also filed Bankruptcy proceedings against Pah Suan Kee under Penang High Court Bankruptcy No. 29-1277-2002 on 15 May 2002 for RM1,835,000.00. The said prceedings was later discontinued and new bankruptcy proceeding was re-filed against Pah Song Hong under Penang High Court Bankruptcy No. 29-3061-2003 on 7 October 2003 for RM1,785,000.00 The solicitors for SHCEC/BW are in the process of filing the Creditor’s Petition.
26

SHCEC/BW also filed Bankruptcy proceedings against Poh Ah Bah @ Poh Song Teik under Penang High Court Bankruptcy No. 29-1278-2002 on 15 May 2002 for RM1,835,000.00. The said proceedings was later discontinued and new bankruptcy proceeding was re-filed against Pah Song Hong under Penang High Court Bankruptcy No. 29-3062-2003 on 7 October 2003 for RM1,785,000.00 The solicitors for SHCEC/BW are in the process of filing the Creditor’s Petition. The solicitors for SHCEC/BW, Messrs Peter Huang & Richard’s evaluation of outcome for this case is favourable. 45. SHCM received a Letter of Demand from Price Waterhouse Tax Services Sdn Bhd demanding payment in the sum of RM30,580.00 for professional services rendered. No further action was taken by the claimant after the above Letter of Demand and SHCM has not given any instructions to its solicitors. The Directors of SHCM proposed to negotiate with the claimant to settle the debts upon implementation of the Restructuring Scheme. 46. There is a claim by Malaysian International Merchant Bankers Berhad (MIMB) against SHCM for RM40,000.00 being outstanding fees for professional services rendered. No further action has been taken by MIMB thereafter. The Directors of SHCM proposed to negotiate with MIMB and to settle the debts upon implementation of the Restructuring Scheme.

27

4.

DOCUMENTS FOR INSPECTION Copies of the following documents are available for inspection during normal business hours at the Registered Office of the Company at Level 3, Wisma E & C, No.2, Lorong Dungun Kiri, Damansara Heights, 50490 Kuala Lumpur, Malaysia from Mondays to Fridays (except public holidays) during business hours up to and including the date of the Entitlement Date: (i) (ii) the Memorandum and Articles of Association of SHC; the audited consolidated accounts of SHC for each of the past five (5) financial years ended December 31, 1999 to 2003; and the first quarter report for the period ended March 31, 2004. the material contracts referred to in Section 2 above; writs of summons referred to in Section 3 above; and

(iii) (iv)

28

Notes :1. A member entitled to attend and vote at the meeting may appoint a proxy to attend and vote in his stead. A proxy may but need not be a member of the Company. 2. A member shall be entitled to appoint more than one proxy to attend and vote at the same meeting. 3. Where a member appoints more that one proxy the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy. 4. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writing or, if the appointer is a corporation, either under seal or under the hand of an officer or attorney duly authorised. 5. The instrument appointing a proxy must be deposited at the Registered Office of the Company at Level 3, Wisma E & C, No. 2 Lorong Dungun Kiri, Damansara Heights, 50490 Kuala Lumpur, not less that forty-eight (48) hours before the time appointed for holding the meeting and any adjournment thereof.


				
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