Kusto, the largest shareholder in Coteccons, has called for an extraordinary general meeting to resolve conflict of interest issues. — Photo courtesy of Reatimes.vn

Singapore-based Kustocem Pte Ltd, a significant shareholder in Coteccons Joint Stock Company with a 17.55 per cent stake, has convened an extraordinary general meeting, or EGM, to be held in mid-July.

This will enable shareholders to vote on sacking the current board of directors (BOD), electing a new board and authorising a special audit of issues like conflict of interest and related party transactions since 2017.

In a press release, Kusto said it sent a written request to the BOD on April 23 and the board of supervisors on April 24 to convene an EGM so that shareholders could decide on these issues.

But the BOD failed to organise the EGM within the required deadline. The supervisory board decided not to organise the EGM either due to a lack of co-operation and obstruction from both the BOD and the board of management (BOM).

“Kusto, therefore, has full legal rights to act on behalf of Coteccons to convene the EGM as provided under Articles 136.5 and 136.6 of the Enterprises Law and Article 13.4 of Coteccons’ Charter,” it said.

This action comes after many years of unsuccessful attempts by Kusto in dialogue with Coteccons’ BOD to resolve the issues internally.

Kusto has raised questions to the BOD and BOM on significant issues related to conflict of interest, related party transactions, the use of Coteccons’ resources and reputation for the benefit of other companies in “Cotecons group” in which it alleged some members of the boards have an interest and demanded they respect their fiduciary duties to Coteccons and its shareholders.

But it said no satisfactory answers were received and all legal attempts by the supervisory board to perform an independent audit of Coteccons’ business activities were obstructed by the boards.

As a result, it expressed no-confidence in the current BOD and BOM, it said.

“This is not a conflict between groups of shareholders. This is a conflict between all Coteccons shareholders and the current executive management team that does not act in the best interest of Coteccons.

“Having the current management team in charge poses existential risks to Coteccons and could potentially destroy all Coteccons’ shareholder value.

“Kusto is exercising our rights in compliance with Coteccons’ Charter and Vietnamese laws to protect the legitimate rights and interests of all domestic and foreign shareholders in Coteccons.

“Kusto is seeking support from Coteccons’ other shareholders to ensure Coteccons’ next management team will act in the best interest of Coteccons.”

Coteccons said that Kusto currently holds 18.23 per cent of voting shares at Coteccons. On June 2, it received a press release from Kustocem Pte. Ltd. (Kusto) shareholder on unilaterally organising the EGM on July 13.

On June 3 Coteccons released a press release related to this issue in which it said “groundless allegations” by Kusto have been causing a negative impact on other shareholders and badly affecting the Coteccons stock price as well as its production and business activities. — VNS