Tiong family likely to gain RM568m from EONCap takeover

KUALA LUMPUR: The Tiong family is expected to gain about RM568mil if the deal for Hong Leong Bank Bhd (HLB) to take over the entire asset and liabilities of EON Capital Bhd (EONCap) goes through.

This was revealed when Primus (M) Sdn Bhd lead counsel Datuk Loh Siew Cheang made a statement on the capital gains expected from the takeover and sought confirmation from the second respondent of the petition, Datuk Seri Dr Tiong Ik King.

Tiong confirmed the statement was true.

From the counsel’s explanation, it was understood that the RM568mil capital gains that the Tiong family expected would come from the 16.6% stake of RH Development Corp Sdn Bhd in EONCap if the deal for HLB to take over the entire asset and liabilities at RM5.06bil, or RM7.30 per share, had gone through.


Datuk Seri Dr Tiong Ik King at the court on Thursday. - Starpic by Kevin Tan
RH Development belongs to one of Tiong’s siblings and the 16.6% stake, or 112.7 million shares, was acquired at entry point of RM2.26 per share or a total of RM254mil.

Following that, Loh also questioned Tiong on whether the Tiong family was ready to exit from EONCap at RM7.10 per share (HLB’s first offer) and RM7.30 per share.

Tiong answered “yes” to both questions.

It was also revealed that Tiong’s interest to exit EONCap overlapped with Rin Kei Mei’s (another EONCap director) interest.

The examination-in-chief session yesterday at the High Court (commercial division) was also heated up when Loh asked Tiong to name the directors who were alleged to be alligned with Primus’ private interest in relation to the HLB takeover offer as stated in his affidavit.

Tiong then named Rodney Ward and Yeo Kar Peng as they might be nominated by Primus.

When the counsel sought Tiong’s confirmation on Yeo’s entry as director in February 2008 prior to Primus, Tiong answered “yes”.

Loh also questioned Tiong on his involvement in the appoinment of the new directors. “You voted in favour of the appointment of new directors (respondent three to respondent 12). Can you tell us what was the purpose?” he asked.

Tiong said the counsel should ask Rin, as he was the one who called for the EGM to appoint new directors.

Rin is also the first respondent in the petition.

But Tiong then explained that he agreed with Rin to the appointment of new directors as he thought it was a good proposal and should support it.

Loh then moved on to read Rin’s affidavit that suggested that the objective of the new board members was to look at the HLB prosposal with an open mind.

Loh then asked: “Do you agree?” And Tiong answered: “In this instance, yes my lord.”

However, Loh questioned the need to appoint new directors when there was no offer to be considered at this point of time.

To recap, HLB’s first offer that expired on Feb 2 was rejected by the previous management. HLB revised its offer at the same price on terms on March 30.

Primus has filed a petition against all of EONCap directors except Ng Wing-Fai (its own reprensentative on the board) regarding the offer by HLB to acquire the entire assets and liabilities of EONCap.

The respondents were nine directors and three companies – Kuala Pura (M) Sdn Bhd, Lintang Emas Sdn Bhd, RH Development – and EONCap (as nominal respondent).

Primus Pacific, which holds a 20.2% stake in EONCap, paid RM9.55 a share when it first bought into the company in 2007.