PETALING JAYA: Minority shareholders of Malaysian fintech company Tranglo Sdn Bhd have filed an oppression suit against TNG Fintech, which acquired a 60% stake in Tranglo from Ekuinas Nasional Bhd for RM114.9 million in October 2018.
The other defendants 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 were approved by Bank Negara Malaysia (BNM) to sit on the board of Tranglo as TNG Fintech’s representatives after the acquisition.
According to a statement released today, the suit was brought about by Impiro Asia Ltd and Mohammad Hassan Rasheed Gharaybeh, who collectively hold 13.6% equity in Tranglo.
Impiro Asia Ltd director Simon Landsheer alleged that Tranglo was in danger of missing its US$3 billion processing value target by 2020, as a result of the situation with the company.
“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,” he said in the statement.
“In addition to impeding business operations, the negotiations to acquire our minority stake were 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,” he added.
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.
The lawsuit follows a series of events that materially impeded business operations, including TNG Fintech’s rejection of Tranglo’s approved financing plan and an unreasonable delay in signing up new bank partners, according to the statement.
“During the acquisition process, TNG Fintech via Kong, had given commitment and assurances to BNM that it will acquire the minority stake by February 1, 2019, and business operations of Tranglo face challenges as TNG Fintech attempts to wrestle control without fulfilling its commitment..
“Whilst TNG Fintech had issued a statement on September 11, 2017 on its completion of a US$115 million Series A funding, Kong admitted in an email on April 8, 2019 to BNM that this funding never materialised.”
The statement claimed that Kong’s previous business ventures, Next Millennium Sdn Bhd and Asia Travelmart Sdn Bhd, were wound up by the Malaysian government and Technology Park Malaysia Sdn Bhd for non-payment of taxes and rental respectively.
It also alleged that Kong has a track record of two personal bankruptcies, one in Malaysia and another in Hong Kong.
TNG Fintech is registered in the British Virgin Islands, based in Hong Kong and controlled by Alex Kong.