Fu Yu Corporation Limited, a Singapore-based company, has responded to key questions from the Securities Investors Association (Singapore) (SIAS), shedding light on board decisions, shareholder concerns, and the company’s strategic outlook. The responses, released on January 24, 2025, provide important insights into the company’s governance and ongoing transformation efforts. Shareholders should note the developments as they could influence the company’s future trajectory and potentially impact share value.

Rejection of Mr. Victor Lim’s Board Application

The Nominating Committee (NC) rejected Mr. Victor Lim’s request to join the board, citing unsuitability based on his capabilities and potential non-conformance to integrity requirements outlined by the Singapore Exchange (SGX). The decision was rooted in Rules 246(5)(a) of the Listing Manual and relevant regulatory requirements. While Mr. Lim presented his four years of experience as the company’s director of strategy and a turnaround plan, the NC found his justifications insufficient, particularly as they were presented verbally and lacked written substantiation.

Controversy Over Independent Directors

Mr. Lim has proposed the removal of the company’s current independent directors (IDs), citing the company’s performance. However, the Board countered that IDs are not involved in the day-to-day management of the company. They also questioned how replacing non-executive directors with Mr. Lim’s proposed candidates—Mr. Gilbert L. Rodrigues, Mr. Ralf Pilarczyk, and Mr. Yang Zhenrong—would significantly improve the company’s performance or share price. The Board remains open to assessing these candidates through the existing NC process.

Board and Management Alignment on Strategic Direction

The Board confirmed that there have been no disagreements with management regarding the company’s strategic direction. The strategies outlined in the Corporate and Business Update (CBU) on November 28, 2023, aim to drive a financial turnaround and lay the groundwork for future growth. These include pivoting from legacy business models and focusing on operational efficiency.

Financial Outlook and Growth Potential

Fu Yu Corporation is optimistic about its financial performance moving forward. The company has recorded increased orders and heightened customer interest, partly driven by inventory stockpiling in anticipation of rising US-China trade tensions. The company secured new clients in FY2024, with ongoing initial stages of prototyping, design, and mould development expected to generate long-term revenue from mass production in FY2025.

Additionally, the company has completed a thorough review of its business portfolio to optimize resource allocation and align with long-term growth strategies. Shareholders should watch for the release of Fu Yu’s unaudited FY2024 financial results, scheduled for the end of February 2025, which could provide further insights into the company’s transformation progress.

Engagement with Controlling Shareholder

The Board acknowledged that Mr. Lim, as a controlling shareholder, expressed his intentions on December 16, 2024. The Board remains open to discussions and has instructed legal advisors to engage with Mr. Lim for the necessary information and documents related to his requisition.