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04-11-2011, 06:31 PM
(This post was last modified: 05-11-2011, 12:14 AM by MrValue.)
This seems like a very good outcome to me.
with father and son each holding >30% but well under 50% to block control, the company could be "in play" if either party decides to sell!
But it's really sad that father and son have to resort to court case to settle their dispute.
Anyone attended the recent AGM? any sign of hostility between father and son? did they say anything about their disagreement at all?
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The courtroom saga may have been settled but the boardroom saga may not be over. Can we expect more buying of shares, perhaps a fight for control of the company? I have this feeling that the share price will slowly rise from here. This is purely conjecture.
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I suppose we can assume in a Chinese father-and-son relationship, blood is always thicker than water, even though it will take time to heal a dispute.
Viz Branz's share price evolution will be guided by the longer term economic fundamentals of the underlying business. Based on the last done price of $0.30 and the 356.5m outstanding issued shares, Viz Branz now has a market cap. of $107m. A relevant question: Is this too demanding for a well-established, profitable and still growing regional FMCG business supported by pretty good brands and distribution networks?
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The Straits Times
Nov 10, 2011
Father, son settle Viz Branz business row
Share deal and clash on how to run beverage firm reasons for dispute
By Jonathan Kwok
A BITTER legal row within the father-and-son team controlling listed beverage firm Viz Branz has been settled amicably before the case went to open court.
While a share deal was at the centre of the row, the conflict revealed a more fundamental clash between generations over how to run the business, sources said.
The family split went public in February when Mr Chng Khoon Peng, a founder and former executive chairman, claimed that his son Ben Chng Beng Beng owed him shares worth about $16 million.
Mr Chng Khoon Peng went to the High Court to settle the dispute. Court filings accessed by The Straits Times contain strident language from both men, suggesting a long legal battle was pending, but earlier this month, it was announced that they had reached a settlement after a series of pre-trial conferences.
A filing to the Singapore Exchange last Friday said the peace deal involves Mr Chng Beng Beng, the firm's managing director and deputy chairman, transferring about 53.3 million shares worth around $16 million at market prices to his father.
Other aspects of the settlement remain confidential.
The transfer, which represents about 15 per cent of Viz Branz's share capital, will reduce Mr Chng Beng Beng's holding from 50.15 per cent to 35.2 per cent. Mr Chng Khoon Peng's stake could, in turn, rise from 23.18 per cent to 38.13 per cent.
The endgame began in February and March as the pair became embroiled in legal proceedings. The elder Mr Chng filed a writ of summons and statement of claim against Mr Chng Beng Beng, the eldest of his four children.
Mr Chng said he transferred a number of his own shares and some company stock to his son in 1997. The original 7.197 million parcel of shares has grown, especially after share splits related to the firm's 2002 listing.
He claimed his son had told him at the time that the shares were collateral for a loan for the firm but the lending requirements demanded that a percentage of shareholders be Singapore citizens or permanent residents.
Mr Chng Khoon Peng was a Malaysian while his son was a Singapore PR.
Mr Chng Khoon Peng claimed in court documents that he was still the beneficial owner of the shares, which were merely held in trust by his son.
But the younger Mr Chng said in court documents that he had informed his father in 1997 that the company's existing share structure already qualified it for the loan scheme.
The share transfer and allotment were 'as a gift' from his father, said Mr Chng Beng Beng, and 'in recognition of the time and effort' he had put into the firm. The younger Mr Chng also said it had been agreed that he should be the beneficial owner of the stock.
Things heated up in October last year when the elder Mr Chng was told he would be re-designated from executive chairman to non-executive chairman, a diminished role. He was to receive $5,000 a month in consultant fees plus a one-off payment.
By contrast, he had been paid between $750,000 and $1 million in salary, bonuses and benefits for the year to June 2010, according to the firm's annual report.
Mr Chng described the re-assignment 'an affront' as he was 'for all intents and purposes a founder' of Viz Branz.
He blamed the move on his son, who had over the years increased his stock holdings to more than 50 per cent, allowing him to effect board changes.
The elder Mr Chng said that part of his son's holdings were stock he was holding in trust for his father, so to use that to remove him was a 'breach of trust'.
The younger Mr Chng countered that he could have changed the board if he wanted to, given his holdings, but did not influence the decision to remove his father as executive chairman.
After his objections to the reshuffle, the elder Mr Chng was soon made executive director and not appointed to the non-executive chairman's role. He earned between $750,000 and $1 million in salary, bonuses and benefits for the 12 months to June 30 this year.
Viz Branz's products include instant coffee brands CappaRoma and Cafe 21.
Sources said that while the tussle was over shares, Mr Chng Khoon Peng, in his mid-60s, and Mr Chng Beng Beng, who is in his early 40s, have disagreed for some years on how to run the company.
'There's a generation gap,' said a source. 'The father has been running the company as a founder. But the younger man is more progressive. As he took over, there's a new management style.
'The older generation will have difficulty getting adjusted.'
jonkwok@sph.com.sg
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I think quite some family companies would encounter the same problem, e.g. Popular holdings.
Should the elder generation step down from executives assuming the role of advisers for the younger generation to rise up?
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I wonder if junior Chng has been so righteous, why would he agree to give away a big chuck of shares to senior Chng...any view on this?
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On 18Nov11 (last Friday), Viz Branz resumed buying back its own shares with a purchase of 45 lots at $0.305/share.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument [18Nov11]
Today (21Nov11, Monday), Viz Branz bought back a further 100 lots at $0.31/share.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument [21Nov11]
Todate, the company has bought back a total of 5,109,000 shares, or 1.43% of its total outstanding issued shares.
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On 22Nov11, Viz Branz bought back a further 110 lots and paid between $0.305 to $0.315/share.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument [22Nov11]
Todate, the company has bought back a total of 5,219,000 shares, or 1.47% of its total outstanding issued shares.
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On 23Nov11 and 24Nov11, Viz Branz bought back a further total 270 lots at $0.31/share.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument [23Nov11]
http://info.sgx.com/webcorannc.nsf/Annou...endocument [24Nov11]
Todate, Viz Branz has bought back a total of 5,489,000 shares, or 1.54% of its total issued shares.
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On 25Nov11, Viz Branz bought back a further 186 lots and paid between $0.305 and $0.31/share.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument [25Nov11]
Todate, Viz Branz has bought back a total of 5,675,000 shares, or 1.59% of its total issued shares.
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