KUALA LUMPUR, MALAYSIA - Media OutReach - 23 December 2019 - The minority shareholders of Malaysian fintech company, Tranglo Sdn Bhd (Tranglo) have filed an oppression suit against TNG Fintech Group Inc (TNG Fintech), which acquired its 60 per cent equity in Tranglo from government-link, private equity fund management company, Ekuinas in October 2018.
Defendants also named in the suit are Alexander Kong King Ong (also known as Alex Kong), Wong Wing Chi (also known as Takis Wong), co-founder of Tranglo Sia Hui Yong and Tranglo Sdn Bhd. Both Kong and Wong sit in the board of Tranglo as TNG Fintech's representatives after the acquisition.
The suit came about after a series of events that materially impeded business operations, including TNG Fintech's rejection of Tranglo's approved financing plan and unreasonable delay in signing up new bank partners.
TNG Fintech also attempted to install Alex Kong's sister as a required signatory of all bank accounts maintained by Tranglo. In addition, Kong and Wong rejected a dividend payout to shareholders despite the company's healthy performance.
Six repeated requests by minority shareholders for a shareholder agreement to be signed were refused by TNG Fintech represented by Kong and Wong. TNG Fintech is registered in the British Virgin Islands, based in Hong Kong and controlled by Alex Kong.
Kong's previous business ventures, Next Millennium Sdn Bhd and Asia Travelmart Sdn Bhd, were wound up by the government of Malaysia and Technology Park Malaysia Sdn Bhd for non-payment of taxes and rental respectively.
Kong also had a track record of two personal bankruptcies, one in Malaysia and another in Hong Kong.
Whilst TNG Fintech had issued a statement on 11 September 2017 on its completion of a USD115 million Series A funding, Kong admitted in an email on 8 April 2019 to the Central Bank of Malaysia (Bank Negara Malaysia) that this funding never materialized.
The suit was brought about by Impiro Asia Ltd and Mohammad Hassan Rasheed Gharaybeh, who collectively hold 13.6 per cent equity in Tranglo. During the acquisition process, TNG Fintech via Kong, had given commitment and assurances to Bank Negara Malaysia that it will acquire the minority stake by 1 February 2019.
Simon Landsheer, Director at Impiro Asia Ltd said, "Banks in Malaysia have flagged and queried why we have a director (Alex Kong) with bankruptcy history. And now, the situation at Tranglo has worsened to the extent that the management and staff time are tied up responding to requests from Kong under the claim of executing his fiduciary duty on Tranglo. Requests such as for information to be supplied and in specific format in a short turnaround time do not contribute to productive operations and as such, Tranglo might miss its USD3 billion processing value target by 2020."
"In addition to impeding business operations, the negotiations to acquire our minority stake were also not conducted in good faith. All five proposals received require the minority shareholder to relinquish board representation the moment the Share Sales Agreement is signed. The proposed payment structures were dependent on TNG Fintech's initial public offering in the United States, of which has not happened as claimed by Alex Kong. Based on Kong's actions, attempts to remove and treatment of directors representing minority interest and his history, we have no confidence in TNG Fintech's proposed initial public offering and the true value of the shares to be swapped," stated Landsheer.
The minority shareholders are seeking for dividends to be paid and Tranglo to be wound up due to the untenable working relationship with TNG Fintech.
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