LionApac – CNA

Shareholders push for meeting

Minority shareholders of Lion Asiapac are making another push for the company to pay out special dividends. Previous calls for such distribution were ignored.

Their requests for special dividends at last year's annual and extraordinary general meetings went unheeded during the release of the company's 2009 half-year financial results last month.

Now, the minority shareholders want another extraordinary general meeting (EGM) before the release of Lion Asiapac's third quarter results on May 15.

Shareholders can request for an EGM if they hold 10 per cent of the total number of shares issued by a company – which amounts to a minimum of 4.05 million shares in Lion Asiapac's case.

However, the number of shares currently held by the minority shareholders amount to only 5 to 6 per cent.

The group is also trying to settle the issue informally through talks with the company's board of directors.

Mr Mano Sabnani, a Lion Asiapac shareholder, said: "The company has got more money than it needs. It can easily pay out 20 cents a share and still have a big cash hoard for new businesses."

Lion Asiapac, which manufactures electronic contracts and supplies scrap metal and quicklime, is a wholly-owned subsidiary of Malaysia-based Lion Group.

Minority shareholders have been asking to be rewarded for their investment after some recent positive developments.

Lion Asiapac successfully divested its subsidiary Anhui Jianghuai Automobile Co (AJAC) last year, which contributed $53 million to its net earnings of $88.5 million.

As of December 2009, Lion Asiapac's balance sheet stood at over $190 million.

Shareholders had previously petitioned Lion Asiapac's chairman Othman Wok, calling for the distribution of special dividends to boost the stock price, which is trading at a heavily-discounted 33 cents to its cash value of 47 cents.

The firm's company secretary then replied to shareholders, noting that "continuing effort is being made to explore new business opportunities in order to generate better returns for the group and enhancing shareholder value".

The reply did not specifically address the requests for special dividends.

Instead, it reiterated that "announcements will be made to, and/or approval will be sought from, the shareholders, as soon as details of any proposed project is finalised".