Announcement Details :
(a) The date of the presentation of the Originating Summons and the date the Originating Summons was served on the ASB/ASCAP.
The date of the presentation of the Originating Summons is 8 October 2010 and the Originating Summons was served on ASCAP on 13 October 2010.
(b) The details of the circumstances leading to the filing of the Originating Summons.
ACE and ASCAP are parties to an Agreement dated 12 August 2008 (as amended by a letter agreement dated 20 August 2008) and the Amended and Restated Shareholders Agreement dated 1 January 2009 (as amended by a letter agreement dated 20 August 2008) (“ARSA”) by which ACE INA was granted a call option to purchase ASCAP’s 49% of the entire issued and paid-up shares in ACE Synergy Insurance Berhad (“ASIB”)(“the Option Shares”).
ACE INA exercised the Call Option on 4 February 2009.
Parties are in dispute on the validity of the ARSA and the Call Option.
ACE INA filed the Originating Summons to compel ASCAP to execute the Sale and Purchase Agreement of Option Shares and to forward the board and shareholders resolutions and Completion documents to ACE INA.
(c) The particulars of the orders sought under the Originating Summons.
Orders to compel the Defendant to perform the Sale and Purchase Agreement for the Option Shares (“the Transaction”) as follows:-
1. convene a general meeting of its shareholders to pass a resolution approving the Transaction;
2. provide to the Plaintiff the Board of Directors’ and Shareholders’ resolutions of ASCAP approving the Transaction;
3. provide to the Plaintiff the duly executed and valid form(s) of transfer of securities in respect of the Option Shares and the original share certificate(s) for the Option Shares;
4. provide to the Plaintiff the duly completed PDS 6 stamping proforma (adjudication forms) in relation to the transfer of the Option Shares;
5. provide to the Plaintiff, as evidence of the authority of each person executing all the aforesaid document(s) :-
i. A certified true copy of the minutes of a duly held meeting of the Board of Directors of the Defendant approving a resolution authorising the execution by the Defendant of the document; or
ii. A certified true copy of the power of attorney conferring the said authority upon each such person;
6. In the event any Dividend is declared by ASIB, an Order that the Defendant be and is hereby restrained from receiving any dividends in respect of the Option Shares;
7. Alternatively, in the event any Dividends is declared by ASIB ad is due or received by the Defendant, an Order that any dividends due or received by the Defendant is to be held on trust for the Plaintiff and paid over to the Plaintiff forthwith;
8. Costs of the Originating Summons application be borne by the Defendant; and
9. Such further relief and orders that the Honourable Court deem fit and just.
(d) The particulars of the orders granted by the Court (“Orders”).
All orders sought by the Plaintiff as set out in items c(1) to c(6) above are granted by the Court and Costs in the amount of RM15,000.00 is to be paid by the Defendant to the Plaintiff.
(e) A confirmation as to whether ASCAP is a major subsidiary of ASB and the total cost of investment in ASCAP.
ASCAP is not a major subsidiary of ASB based on the definition of major subsidiary which contributes 70% or more of the profit before tax or total assets employed of ASB on a consolidated basis and the total cost of investment in ASCAP as at 30 September 2010 is RM281,384,178 after netting off impairment loss.
(f) &(g)The financial and operational impact of the Orders on the ASB Group and the expected losses, if any, arising from the Orders.
On completion of Transaction:-
We do not expect any operational impact on ASB Group.
For illustration purpose, we have computed the proforma effects as follows:-
Based on the audited financial results of the ASB Group as at 31 December 2009 and the unaudited financial results of the ASB Group as at 30 September 2010, the Transaction is expected to increase the Net Assets (“NA”) of the ASB Group by about 3.2 sen and 0.6 sen respectively and the expected one-off gross gain on disposal is approximately RM15.3 million and RM3.0 million respectively.
ASB Group’s carrying value of its investment in ASIB as at 30 September 2010 has taken the share of profit for the nine-month period ended 30 September 2010 into consideration. Therefore, this has resulted in a lower computed gain on disposal as at 30 September 2010 as compared to 31 December 2009.
The increase in NA and computed the gain on disposal as set out above does not take into account the potential impact of taxation and the incidental cost in relation to the Transaction, which if incurred, will reduce the abovementioned net increase in NA of the ASB Group and the gain on disposal.
The computed gain on disposal as set out above is one-off. However, there will be a cash inflow to the Group arising from the Transaction.
(h)The steps taken and proposed to be taken by ASB Group in respect of the Orders.
ASB Group will take the necessary steps in respect of the Orders as set out above which will include convening the Board of Directors’ and shareholders’ meetings.
However, ASCAP is currently seeking legal advice to appeal to the Court of Appeal against the said orders and has filed leave of the Court for a Judicial Review in relation to the decision of the MOF in approving the Transaction.
This announcement is dated 2 December 2010.
|
