Galasys PLC Extraordinary General Meeting on 12 September 2016 (1825J)

TIDMGLS

RNS Number : 1825J

Galasys PLC

07 September 2016

7 September 2016

Galasys Plc

("Galasys" or the "Company")

Extraordinary General Meeting on 12 September 2016

This announcement is made by Kim Seng Teh ("Mr Teh"), the Non-Executive Chairman of the Company, in the context of the General Meeting of the Company convened for 12 September 2016 (the "September GM").

It is announced that today Mr Teh has sent to all shareholders of the Company a document (the "Circular") updating shareholders on important developments relevant to the September GM since the notice convening the September GM was issued, as well as setting out Mr Teh's position on the September GM and on the on-going legal proceedings in Jersey, England and Malaysia (the "Proceedings") generally.

Click on or paste the following link into your web browser to view the full document

http://www.rns-pdf.londonstockexchange.com/rns/1825J_-2016-9-7.pdf

In the Circular, Mr Teh explains to shareholders of the Company that there are likely to be significant economic consequences for the Company if shareholders vote in favour of the resolutions proposed at the September GM (the "Proposed Resolutions") following the Jersey Court hearing on 30 August 2016.

As noted by Mr Teh, if the shareholders of the Company vote in favour of the Proposed Resolutions:

(a) the Company will likely be liable for the legal costs incurred by lawyers instructed by the nomination committee of the Company (the "Nomination Committee") in relation to all the legal proceedings issued across all the jurisdictions (that is Malaysia, England and Jersey) which, as at the date of the Circular, are approximately GBP2.4 million (about RM13 million). Alternatively there will likely be further long running litigation as to the Company's responsibility to meet these costs; and

(b) the Company will be unable to recover the above costs from Mr Seah; Mr Chuah; Mr Hee and Mr Chin (the "Respondents") and their connected company Well Oriental Investments Limited ("WOI"), notwithstanding that these significant costs have been incurred as a result of the conduct of the Respondents and WOI.

If shareholders vote against the Proposed Resolutions and the Company succeeds in the Jersey Proceedings, it is likely, as Mr Teh notes, that the Respondents would be ordered to pay a significant amount towards the costs incurred by the Company in the Jersey Proceedings. Further, the trial is due to be concluded by 11 October 2016 and the judgment of the Jersey Court is likely to bring an end to this long running dispute.

For the reasons set out in the Circular, Mr Teh's preference is to resolve the Proceedings by way of a global settlement as soon as possible so that the Company can focus on attempts to appoint a new nominated adviser and to avoid a de-listing of its shares. However, if this is not possible, Mr Teh believes that of the two remaining options available, being either (a) shareholders voting in favour of the Proposed Resolutions to discontinue the various Proceedings or (b) going to trial in Jersey on 20 September 2016; the option of going to trial is in the best interests of the Company and its shareholders.

This is because; the serious allegations of misconduct against various directors of the Company should be determined by the Jersey Court; the likely significant cost consequences to the Company of it simply discontinuing the various Proceedings at this very late stage - without the ability to seek to recover such costs from the Respondents; the fact that the Jersey Proceedings will be completed within a short timeframe; and the likelihood that the decision by the Jersey Court will bring closure to this long running dispute (rather than see the Company engaged in significant follow on proceedings).

Mr Teh concludes that if shareholders of the Company vote to discontinue the Proceedings then they do so in the knowledge of (i) the very significant legal costs that will likely have to be paid from the Company's cash reserves; and (ii) the likelihood of further on-going litigation hanging over the Company.

The Circular also contains a summary of the background to the Proceedings.

Enquiries:

 
Galasys PLC                 + 6032858 9959 
Seah Kok Wah/Teh Kin Seng 
Newgate                     0203 653 9850 
Adam Lloyd 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

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September 07, 2016 03:45 ET (07:45 GMT)