Open Letter to Board of Directors of Datapulse from a group of minority shareholders
We refer to your announcement dated 15 April 2018 on “BOARD’S RESPONSE TO THE PROPOSED NEW DIRECTOR’S PLAN FOR A PROPOSED PAYOUT TO SHAREHOLDERS.”
As a group of concerned shareholders, we welcome Ms Intan Ng’s plan to pay an interim dividend of 20 cents per share amounting to $44 million before 14 June 2018 if they were appointed to the board. If a majority of the minority shareholders vote for the proposed directors at the EGM on Friday 20 April 2018, it means that they have broad support of the minority shareholders for both their appointments and the plan to pay an interim dividend.
On 24 January 2018 the Company announced it was expecting to receive net sale proceeds of S$52.9 million from the disposal of the Tai Seng factory and record a gain of S$44.6 million. And in view of that, the Board proposed to distribute a special dividend of 1 cent for each share.
The proposed special dividend was said to be “in recognition of, and to reward shareholders for their continued support of the Company.” We would like to point out that the Board was only prepared to pay $2.19 million out of the gain from the disposal which is “peanut.”
As disclosed in the circular to shareholders dated 26 March 2018, there is cash of about $84.3 million in the company. We think that if the Board feels that Ms Intan Ng is “using a cash return plan as her manifesto to encourage Shareholders to vote in the Proposed New Directors to the Board,” we welcome the Board to make a similar gesture of paying an interim dividend of the same quantum.
Perhaps then, we as shareholders will consider to give the Board the latitude to utilise our money and “use a substantial portion of Datapulse’s cash assets for (1) Datapulse’s operating expenses for the “Existing Business,” and (2) “the currently anticipated requirements for the Proposed Consumer Business and Proposed Investment Business” as stated in the circular.
If the Board strongly believes that the Company can enhance shareholder value through a business diversification and “Wayco is a profitable hair care, personal care and household chemical business which can be nurtured into a regional brand for the fast-growing personal grooming sector,“ we urge the Board to consider returning our cash and raise money from the capital market as is the intention of the requisitioning shareholders if any diversification is contemplated.
I was up at Bedok North yesterday from my place at Sixth Ave to pick up a proxy form from one Tan Chye Yang who called me out of the blue. Chye Yang is going to be 90 years old in ten days and is a shareholder of Datapulse. Chye Yang came to know me when I last went around to rally for support for the cause of voting against Michael Mun in his plan to take Aztech private after the company was delisted for which the minority shareholders succeeded.
Chye Yang said he holds some Datapulse shares and he wishes to proxy me. It is shareholders like Chye Yang we want to help get back his money otherwise he would not see it again. There are many more Chye Yangs among the 9000 shareholders in Datapulse. We want to help them get their money back which otherwise they will not see again.
Chew Ah Kong
For and On Behalf of A Group of Concerned Shareholders