(By Jared Heng)
Many minority shareholders of Parkway Holdings Limited are troubled by some media publicities arising from the partial offer by Khazanah, according to Securities Investors Association (Singapore), or SIAS.
In response, Mr David Gerald, President and CEO of SIAS, and Mr Kenneth Pang (Member of SIAS Corporate Govern- ance Committee), Wednesday morning met with Dr Tan See Leng, Parkway’s CEO & Managing Director, Mr Richard Seow, Parkway’s Vice Chairman, Dr Lim Cheok Peng, Executive Vice Chairman of Parkway Health and Mr Dilhan Pillay, Legal Advi- sor to Parkway Holdings (“The Parkway Team”) at the SIAS office in Singapore to discuss the above issue and other pressing matters.
Khazanah, a Malaysian state investment company, offered S$3.78 per share in cash on May 27 to increase its stake in Parkway to 51.5 per cent and overtake India’s Fortis Healthcare Ltd as the biggest stakeholder.
The issue of independence of the Parkway Board is also an area of controversy in view of the existing agreement between Parkway’s and Fortis’s senior management. The agreement requires Parkway’s senior management to take instructions from Fortis when deciding on company affairs. This reportedly gives Parkway’s minority shareholders the perception that Parkway’s senior management, when voting at meetings as directors, will not be able to exercise their voting rights independently.
The Parkway Team assured SIAS that they have always acted within the law and the requirements of the corporate governance code, and will continue to do so in the future. They have reportedly always acted in the interest of all shareholders and, in particular, have never compromised the interests of minority shareholders.
To address all other outstanding issues arising from the partial offer, and in particular, the suggestion by Associate Professor Mak Yuen Teen (Director, Corporate Governance and Finan- cial Reporting Centre, NUS Business School) that the “current and past actions of these directors be reviewed by the regula- tors to determine if they have discharged their fiduciary duties to the company,” the Parkway Team has agreed with SIAS that they would meet SIAS officials together with the media for a session.
Such a session will seek to address all questions and issues that have been raised to-date in the media that may have a significant impact on Parkway directors’ abilities to act inde- pendently and discharge their fiduciary duties as required by law. SIAS said it arranged this meeting with the Parkway Team in the interest of all minority shareholders of Parkway.
Seeking Clarification from Khazanah
Separately, SIAS also noted a Business Times front page article on Wednesday titled ‘If Khazanah fails, poison pill could hurt Parkway’ by S Jayasankaran. The article suggested that should Khazanah’s partial offer fail, there may be implications in relation to Parkway’s continuing investment and interest in Malaysia’s Pantai Group, as the earnings contributions of Pantai Group to Parkway Holdings have been stated to be significant to Parkway’s earnings. This is a significant issue for all shareholders of Parkway, according to SIAS.
Appropriately, Mr David Gerald is seeking clarification from Mr Ahmad Shahizam Mohd Shariff, Director, Investments, Khazanah Nasional, on the implications highlighted in the article. Parkway’s minority shareholders would welcome such clarification, if any, from Khazanah in the context of their considera- tion of the offer by Khazanah for their shares, SIAS said.
