Tomei Consolidated Berhad Tables Key Shareholder Proposals for 2026 AGM

Overview

Tomei Consolidated Berhad has released a comprehensive circular to its shareholders ahead of its Twenty First Annual General Meeting (AGM) scheduled for 26 May 2026. The circular covers two significant proposals that may have material implications for the company’s operations, governance, and potentially its share price and valuation:

• Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions (RRPTs) of a Revenue or Trading Nature
• Proposed Renewal of Authority to Buy-Back Up to 10% of Its Total Number of Issued Shares

1. Proposed Renewal of Shareholders’ Mandate for RRPTs

Background & Rationale

Tomei seeks to renew its mandate to engage in recurrent related party transactions (RRPTs) that are necessary for its day-to-day operations. These transactions involve the rental of various premises from companies and individuals closely linked to the company’s major shareholders and directors, particularly members of the Ng Family. The rationale behind this renewal is to enable the company to transact efficiently with related parties without the administrative burden of seeking shareholder approval for each transaction, thus enabling timely and confidential business dealings.

Key Details of the RRPTs

• The RRPTs primarily relate to the rental of commercial office space, retail shop lots, and warehouses from entities controlled by the Ng Family and other related parties.
• The total proposed value of these transactions for the coming mandate period is estimated at RM2.7 million, with the largest component being rental payments to Oasis Properties Sdn Bhd (OPSB) and Best Arcade Sdn Bhd (BASB).
• All tenancy agreements are subject to approval by the Board of Directors based on the Audit and Risk Management Committee’s (ARMCO) recommendation.
• No amounts due from related parties were overdue as at 31 December 2025, indicating healthy credit discipline.

Governance and Safeguards

• All RRPTs must be conducted at arm’s length, on terms not more favourable than those offered to the public.
• Interested directors and major shareholders—and persons connected to them—must abstain from voting on the RRPT resolution at the AGM. They are also required to ensure that their connected persons abstain from voting.
• The ARMCO will review RRPTs quarterly and can seek additional information or independent comparisons to ensure fairness. At least two comparable transactions with unrelated parties are used as benchmarks where possible.
• Disclosure of transaction values and related parties will be made in the annual report.

Potential Price-Sensitive Points

• The RRPTs involve substantial lease commitments with related parties, which may raise concerns over potential conflicts of interest and the possible impact on minority shareholders. However, the company asserts strong governance measures are in place.
• The continuing dependence on related party premises may be seen as a risk but also indicates stability in operating assets.
• The RRPTs are not expected to have a material effect on earnings, net assets, gearing, or dividend policy.

Shareholder Action Required

Shareholders are advised to review the full circular and consider the governance and rationale presented before voting on the proposed renewal at the AGM. Interested parties will abstain from voting.

2. Proposed Renewal of Authority to Buy-Back Shares

Background & Mechanics

The Board seeks renewed authority to buy back up to 10% (13,860,000 shares) of the company’s issued share capital using retained earnings (RM179.064 million as at 31 December 2025). The buy-back can be funded by internal resources and/or borrowings, and shares purchased may be cancelled or held as treasury shares for potential resale or distribution as share dividends.

Key Details

• Purchases must not exceed 15% above the weighted average market price of the preceding five market days.
• Any resale of treasury shares must be at or above the 5-day weighted average market price, unless held for at least 30 days and not resold below cost.
• The company currently holds no treasury shares and has not conducted any buy-backs in the past 12 months.
• The buy-back will only be executed if it does not breach the minimum 25% public shareholding spread requirement.
• The company will ensure the share buy-back does not trigger a mandatory general offer under the Code for Takeovers and Mergers.

Potential Impact on Shareholders and Share Price

• A share buy-back reduces the number of shares in circulation, which can potentially boost earnings per share (EPS) and support the market price.
• Treasury shares, if resold at a higher price, could realise gains for the company. If distributed as dividends, shareholders benefit directly.
• The buy-back may reduce available financial resources for other investment opportunities or dividends, and if financed by borrowings, may increase gearing and interest costs.
• The proposed buy-back is not expected to have a material negative impact on the company’s financials if funded from retained earnings.

Share Price Performance

Last traded price as at LPD (13 March 2026): RM2.010

Summary for Investors

• Material Related Party Transactions: Ongoing dependence on related parties for operational premises and the size of the transactions may be scrutinized by investors interested in governance and minority rights.
• Share Buy-Back Programme: Potential to support the share price and improve EPS, but may reduce financial flexibility.
• Voting Implications: Major shareholders and interested parties will abstain, so the resolution’s passage will reflect the support of independent shareholders.
• Potential for Share Price Movement: Both the approval and execution of the share buy-back, as well as transparency and governance around RRPTs, could influence investor sentiment and share price.

Action Required

Shareholders are encouraged to study the proposals in detail and participate in the AGM, either in person or by proxy. The resolutions could impact shareholder value, company governance, and the market price of Tomei shares.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should review the full circular and consult their professional advisers before making any investment or voting decisions. Past performance is not indicative of future results. The company’s actual actions may vary based on market conditions and internal Board decisions.

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