Dear Respected Authorities,

As retail investors and shareholders of South Malaysia Industries Berhad (SMI), we feel compelled to voice our growing concerns and frustrations regarding the Mandatory General Offer (MGO) that has been fraught with uncertainty and confusion. We seek clarity and justice considering recent developments that have left us, as minority shareholders, in the dark and at the mercy of conflicting information.

A Timeline of Confusion?

On 20 August 2024, SMI announced the receipt of a Notice of Unconditional Mandatory Take-Over Offer from TA Securities Holdings Berhad on behalf of Target 1 Sdn Bhd (T1), offering to acquire the remaining ordinary shares of SMI at RM0.45 per share. This announcement was seen by many of us as a potential opportunity to recover value in our investments.

However, the situation became unclear when, on 27 August 2024, SMI disclosed that an interim injunction had been filed by a Mr. Mah Sau Cheong, seeking to halt any further steps under the takeover offer until the court had decided. From there, a series of legal updates followed, each more bewildering than the last:

1.On 2 September 2024, SMI’s Board of Directors, after legal consultation, stated that they would cease any action related to the MGO until the Johor Bahru High Court ruled on the interim injunction, with a hearing scheduled for 27 October 2024.

2.On 5 September 2024, SMI announced that the Judicial Commissioner had refused to grant the Plaintiff’s ad interim injunction, thus allowing the MGO process to move forward, albeit still pending the outcome of the court hearing at the end of October.

Our Concerns as Shareholders

Considering these conflicting announcements, we as shareholders have been left with more questions than answers. Our concerns can be summarised into three key points:

A. Is the MGO Active or On Hold?

Initially, the MGO seemed to be progressing as announced on 20 August 2024, but the subsequent legal proceedings have thrown everything into uncertainty.

Is the takeover offer still active, or has it been put on hold pending the court’s decision?

The constant back-and-forth is leaving us unsure of the status of the MGO, and we deserve to know if the offer is still in effect.

B.Impact on Our Investments

The ongoing legal disputes raise concerns about how they will affect the MGO and, more importantly, the value of our investments. The RM0.45 per share offer presented by T1 initially gave us a clear path forward, but with the legal challenges, we are left wondering if this offer will proceed, be delayed, or even be withdrawn. As retail investors, the lack of certainty makes it impossible for us to make informed decisions regarding our holdings.

C.Lack of Clear Communication

While SMI has issued several announcements, none have adequately addressed the real concerns of shareholders. The updates have been vague, offering little insight into what the legal developments truly mean for the MGO and for us as stakeholders. The company has a responsibility to provide clear, transparent communication, and we believe that this obligation is currently not being met.

Our Appeal for Justice

We, the shareholders, respectfully request that the relevant authorities — Bursa Malaysia, the Securities Commission Malaysia, the Minority Shareholders Watch Group, and the Companies Commission of Malaysia — take immediate action to ensure greater transparency and accountability from SMI. We urge the authorities to compel SMI’s management to provide clear, consistent communication regarding the status of the MGO and its implications for all shareholders, particularly minority investors like us.

This situation has left us in a state of confusion and uncertainty, and we believe it is crucial that our voices are heard. We are not just asking for clarity; we are asking for justice and fair treatment.

We hope that the authorities will act swiftly to address our concerns and ensure that the rights of all shareholders are protected throughout this process.

Sincerely,

The Concerned Shareholders of South Malaysia Industries Berhad (SMI)