Tire retreading company Autoways Holdings said today it will be initiating investigations soon into complaints made by minority shareholders about a takeover offer.

"The board of directors will be calling for an investigation. Our duty now is to gather as much information as possible and we would be calling an independent party to investigate our financial records," said Autoways chairman and managing director Chua Sin Han at a press conference today.

Abdul Razak Jalil, who is representing other minority shareholders of Autoways, today submitted a memorandum to Chua at the company's annual general meeting, asking for it to account for its duty to minority shareholders in a takeover offer in 1996.

Abdul Razak is suing Linksun Avenue for its failure to adhere to the Securities Commission (SC) Act in not making a general offer to the minority shareholders of Autoways when it bought 37 percent of Autoways shares. The suit was filed at the Kuala Lumpur High Court two weeks ago.

He has also lodged a report with the SC but has yet to receive any reply beyond an acknowledgment that investigations will be conducted.

Abdul Razak said sometime in July last year he came to know of newspaper reports stating that Linksun, its directors as well as MCA president and Transport Minister Dr Ling Liong Sik owed another businessman Soh Chee Wen about RM150 million through transactions involving Autoways shares.

The directors of Linksun include Ling's son Hee Liong, 32.

Abdul Razak said in his writ that he subsequently discovered that Linksun had bought more than six million Autoways shares at the end of 1996.

Fiduciary duty

In his memorandum to the Autoways company board today, Abdul Razak questioned how the movement of 37 percent of shares, belonging to one shareholder, could escape the attention of its board.

He also asked, "Is it not the duty of the share registrars of Autoways to update the records of shareholdings at all material times? Does the board not owe a fiduciary duty to all shareholders to ensure that the shareholders are informed whenever a Mandatory General Offer (MGO) is triggered by any shareholder?"

Chua, who began his term as the Autoways chairperson and director in 1998, explained that the issue only arose during the tenure of the former board of directors.

"I was on the board with another director at the time but I was a non-executive member. Before this, I was only the managing director of Autoways Construction. Also, no such issue was brought up during those meetings," he said.

Barred

Abdul Razak had tried to attend the AGM this morning but was barred.

"As a minority shareholder holding 754,000 shares I should have been allowed in," he said.

However, Firdaus Khan Parit Khan, Autoways' secretary, later told reporters that Abdul Razak was in fact only the trustee holder of the shares, as the actual holders of the shares were Alliance Bank and the Bayerische Landesbank.

"We have actually acted in good faith and we told him that if he could get both banks to fill out forms naming him as the proxy by yesterday, then exercising our discretion, we would have let him in to the AGM but he couldn't," Firdaus said.

When contacted later, Abdul Razak said that he could not get the authorisation in time as the offices of both banks were in Singapore.

"However I am glad that Autoways is willing to conduct the investigations," he said.