My Letter to the Management in South Malaysia Industries

As an investor in South Malaysia Industries Berhad (SMI), I've watched closely and, frankly, with a growing sense of frustration. Today, I feel compelled to share my perspective, especially in light of recent developments that have only deepened my concerns.

It was just last Thursday, March 15th, 2024, when Honsin Apparel Sdn Bhd, under the Techbase Industries Berhad umbrella, voiced out what many of us have been silently pondering. The management practices at SMI have been, to put it mildly, disheartening. Since 2019, SMI has been on a downward trajectory, with losses piling up. Yet, paradoxically, director fees have seen an uptick. It's a juxtaposition that's hard to digest as a stakeholder whose interests are intertwined with the company's fortunes.

The tipping point for many of us was SMI's decision to file a judicial review against the Securities Commission Malaysia (SC). It's a move that raises more questions than it answers. But what truly got under my skin was learning about the absence of an Annual General Meeting (AGM) for the last 21 months. It's a deviation from the norm that's not just unusual but deeply concerning. An AGM is a cornerstone of corporate governance, offering a transparent platform for management and shareholders to interact, discuss, and strategize. This delay casts a long shadow over the company's commitment to transparency and accountability.

I echo Honsin Apparel's sentiment when they point out the misalignment of the current Board of Directors' (BOD) focus with shareholder interests. It's as if the BOD's priorities are skewed towards self-preservation rather than steering SMI towards recovery and growth. The potential consequences of such actions aren't just confined to SMI but could ripple out, affecting foreign investment confidence in Malaysia. It's a scenario that none of us want.

The situation took an even more disappointing turn when Honsin Apparel's call for an Extraordinary General Meeting (EGM) was met with resistance, with SMI applying for a stay on the judgement. It's a delay tactic that serves no one, least of all the shareholders and the company itself. And SMI's application to the Companies Commission of Malaysia (SSM) for an AGM delay, without any valid reason, only adds to the frustration.

I stand behind Honsin Apparel's lawsuit against the major shareholder of SMI, AsiaPac. It's a necessary step to bring to light the issues plaguing SMI and to hold those responsible accountable. We, the shareholders, need to band together more than ever. The upcoming AGM is not just another meeting. It's an opportunity for us to make our voices heard, to demand transparency, accountability, and a path forward that aligns with the company's and shareholders' best interests.