SINGAPORE (THE BUSINESS TIMES) – Medtech firm QT Vascular has received a notice of intention from certain shareholders holding more than 10 per cent of the company to call for an extraordinary general meeting (EGM) to oust chief executive officer and executive director Eitan Konstantino and three other members of the board.
One of the shareholders, Mission Well Limited, owns a 10.19 per cent stake in QT Vascular, or nearly 228.2 million shares, while the other, Tansri Saridju Benui, owns 50,000 shares, the firm said on Tuesday (Nov 16).
Describing itself as a “long-term shareholder” of QT Vascular, Mission Well had also issued an open letter to shareholders of QT Vascular to petition for the removal of Mr Konstantino as well as executive director Momi Mimon Brosh and independent directors Sho Kian Hin and Ng Boon Eng.
Mission Well said it was making the recommendation “to seek an improvement in the future of the company” given a number of findings and concerns highlighted in the open letter.
Instead, the dissident minority shareholders are proposing that the EGM be called for shareholders to vote for the appointment of Tansri as an executive director, and the appointment of Mission Well director Christian Kwok-Leun Yau Heilesen as non-independent non-executive director.
In addition, Mission Well and Tansri are proposing for shareholders at the EGM to vote in three others – Leung Yu Tung Stanley, Zhou Jia Lin, and Chay Yiowmin – as independent non-executive directors.
In the open letter, Mission Well noted that QT Vascular had been chalking up “consecutive” net losses since financial year 2019. For the nine months ended June 2021, QT Vascular recorded zero revenue and a net loss of U$728,000.
“The auditors of the group had raised going concern assumptions on the group’s ability to operate, to realise their assets and pay up their liabilities,” Mission Well said.
Among other things, Mission Well also took issue with QT Vascular’s proposed private placement in May this year of nearly 4.1 billion new shares at 0.18 cent apiece to raise gross proceeds of $7.3 million and the subsequent acquisition of a 60 per cent stake in Asia Dental Group for a purchase consideration of about $7.7 million.
Mission Well argued that QT Vascular had overpaid for Asia Dental Group, with the purchase consideration representing premiums of 3.7 times its net book value, 12.8 times its net profit before tax, and 8.6 times its historical earnings before interest, taxes, depreciation and amortisation (Ebitda).
It added that the proposed placement price would have represented a steep discount of around 70 per cent to the weighted average price of 0.6 cent for shares traded on May 24.
In an email responding to queries from The Business Times, QT Vascular chief financial officer Kelvin Tong said there was some information in the open letter that was “not accurate”. He added that the group intends to address this separately “soon”.
“We are still looking into it and will respond accordingly in due course,” Mr Tong said.
Shares of QT Vascular last traded flat at one cent before it called for a trading halt at 1.11pm on Nov 16 pending release of the announcement.