KUALA LUMPUR (Dec 8): Sarawak Consolidated Bhd (SCIB) shareholders have refused to — for the second time this year — approve the payment of directors' fees and benefits for the end-February to Dec 7 period of up to RM900,000 at the group's 46th annual general meeting (AGM) held on Thursday (Dec 8). Also rejected was a resolution to seek approval for the payment of the same to the tune of RM1 million for the period spanning Dec 8 till the next AGM.
This means the civil engineering specialist's directors have not received any fees or benefits for the most part of this year, and will continue to do so until it manages to gain shareholders' approval in the next shareholders' meeting. SCIB shareholders previously rejected the payment of directors' fees and benefits at the company's previous AGM on Feb 28.
This is despite the group's management having made an appeal to shareholders in its AGM notice dated Oct 31 to approve the resolutions on the directors’ fees and benefits by pointing out that they "have executed their fiduciary and statutory duties to the company and as well have attended series of scheduled-meetings and have significantly contributed in solving issues surrounding the company during the aforesaid period and for a period from March 1, 2022 until current, despite shareholders having not approved their proposed fees and benefits in the previous AGM held on Feb 28, 2022."
Meanwhile, two scheduled resolutions concerning the re-election of Datuk Mohd Abdul Karim Abdullah and Datuk Abdul Hadi Abdul Kadir to SCIB's board were abruptly withdrawn.
According to the post-AGM filings that SCIB made to Bursa, the resolutions were not tabled as the duo had expressed their intention in writing not to seek re-elections, citing "personal reason and commitment". Hence, they retired on the same day.
Abdul Hadi was appointed as non-independent and non-executive director on April 1, 2019.
Abdul Karim's retirement, meanwhile, comes less than a month after he was redesignated as non-independent and non-executive director on Oct 25 from his previous role as chairman — which he had held since Oct 1, 2019. The chairmanship was passed to Shamsul Anuar Ahamad Ibrahim, who was redesignated as SCIB's independent non-executive chairman. Abdul Karim, the founder of oil and gas company Serba Dinamik Holdings Bhd, remains the largest shareholder of SCIB, though his stake has been reduced to 23.996% from the 50.49% he held as at Sept 27, 2019.
All other ordinary resolutions, including those involving the reappointment of eligible directors up for re-election, namely Shamsul Anuar, Ku Chong Hong, Noor Azri Noor Azerai, Mohd Shakir Shahimi, and Nuraiman Shaiful Annuar, were approved.
Also approved was the resolution to reappoint Nexia SSY PLT as SCIB's auditors, with authority given to the board of directors to fix the auditors’ remuneration.
In a statement, SCIB group managing director Rosland Othman thanked shareholders for having placed their trust and confidence in what has been a challenging period for SCIB. "On behalf of SCIB, we would also like to thank both Datuk Mohd Abdul Karim and Datu Abdul Hadi for their years of leadership and dedication to SCIB," he added.
According to Rosland, SCIB is looking forward to 2023, following the measures adopted by the company in focusing on its strength and ensuring resilience in the face of changes in the construction industry.
Among measures SCIB said it took recently to safeguard its interest were a kitchen-sinking exercise pertaining to the recent cancellation of four projects, and arriving at a settlement agreement over six projects in Qatar and Oman.
Last month, SCIB's external auditor expressed a qualified opinion on the group's financial statement for the year ended June 30, 2022 (FY2022) involving the settlement agreement relating to the six construction projects carried out in Qatar and Oman. The auditor, Nexia, pointed out that it was unable to determine the "accuracy, existence and completeness" of the group and company's receivables that were due from the foreign project owners, amounting to RM60.67 million and RM11.86 million respectively, due to lack of sufficient audit evidence of the transactions.
Additionally, Nexia said it was unable to determine the "accuracy and correctness" of SCIB's accumulated losses as at July 1, 2022, of RM53.92 million at the group level and of RM38.11 million at the company level.
"We were unable to satisfy ourselves that the subsequent transactions, if any, affecting these balances, do not contain material misstatements that materially affect the current period's financial statements," Nexia had said.
In response, SCIB said the audit matters were not expected to be carried forward to FY2023, and that there was no financial impact in particular to the trade receivables balances in respect of the foreign project owners, which it said had been fully impaired in the FY2022 financial statements.
As of Nov 30, SCIB had an order book of RM564.7 million, with earnings visibility until 2026.
Rosland, in Thursday’s statement, further said SCIB intends to leverage on its strengths as a leading precast concrete and industrialised building system (IBS) manufacturer to seek opportunities for the group's engineering, procurement, construction and commissioning (EPCC) business, "where we specialise in small-to-mid-sized projects for water, electricity, roads, health and education infrastructure".
SCIB's share price closed unchanged at 18 sen, bringing the group a market capitalisation of RM101.9 million. Year-to-date, the stock price has fallen 14.63%.
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