Innoprise Plantations Berhad Seeks Shareholder Approval for Major Related Party Transactions Mandate

Key Highlights

• Innoprise Plantations Berhad (INNOPRISE) is proposing both a renewal and a new mandate for Recurrent Related Party Transactions (RRPT) of a revenue or trading nature.
• The resolution will be tabled as a special business at the upcoming 32^nd Annual General Meeting (AGM) scheduled for 21 May 2026 in Tawau, Sabah.
• The proposed mandates cover a range of transactions between INNOPRISE Group and related parties, with several transactions exceeding RM10 million, RM38 million, and RM330 million in estimated value for the period from May 2026 to May 2027.
• Major shareholders and directors involved in the transactions will abstain from voting, ensuring an independent decision by other shareholders.
• The proposal streamlines the approval process for RRPT, potentially enhancing operational efficiency and reducing administrative costs.

Details of the Proposed Shareholders’ Mandate

Background and Rationale

INNOPRISE previously obtained shareholder approval for RRPT at the 31^st AGM on 26 May 2025. The current mandate will expire at the upcoming AGM, necessitating a renewal and the introduction of a new mandate to cover additional transactions. The company argues this is essential for the group’s day-to-day operations, allowing it to transact with familiar, reliable counterparties under normal commercial terms and at arm’s length. This approach is intended to reduce administrative burdens and ensure uninterrupted business operations.

Principal Activities

INNOPRISE is primarily engaged in investment holding and management services. Its key subsidiaries include:

• Serijaya Industri Sdn Bhd (SJI): Oil palm plantations and palm oil milling.
• IPB Bio Energy Sdn Bhd (IPBBE): Producer and supplier of renewable energy.

Related Parties and Transaction Classes

The mandates cover transactions with the following related parties and their connected persons:

• Innoprise Corporation Sdn Bhd (ICSB) (50.22% shareholder)
• TSH Resources Berhad (TSHR) (21.94% shareholder)
• Benta Wawasan Sdn Bhd (BWSB): Wholly owned by ICSB
• TSH Plantation Sdn Bhd (TSHP), TSH Plantation Management Sdn Bhd (TSHPM), TSH-Wilmar Sdn Bhd (TSHW), TSH Biotech Sdn Bhd (TSHB), Norsechem (Sabah) Sdn Bhd (NSB): All entities linked to the major shareholders or directors and involved in relevant business activities (palm oil, fertilisers, seedlings, etc.)

Nature and Value of Transactions

Key transactions and their estimated values for 21 May 2026 to 20 May 2027 include:

• Sale of Crude Palm Oil by SJI to TSHW: RM330 million
• Sale of Palm Kernels by SJI to TSHW: RM38 million
• Purchase of Fresh Fruit Bunches by SJI from BWSB: RM10 million
• Sale of Fresh Fruit Bunches by SJI to TSHPM: RM10 million
• Sale of Empty Fruit Bunches, Fibre and Shell by SJI to TSHPM: RM10 million
• Purchase of Organic Fertiliser by SJI from TSHPM: RM2 million
• Purchase of Tree Seedlings by SJI from TSHB: RM2 million
• New Transaction: Purchase of Fertilisers by SJI from NSB: RM15 million

These transactions are significant in volume and value relative to INNOPRISE’s operations and may impact the company’s future earnings depending on market conditions and the execution of these agreements.

Review and Safeguards

To ensure fairness and protect minority shareholders, all RRPT must:

• Be conducted at arm’s length and on commercial terms not more favourable to related parties than those offered to the public.
• Be reviewed quarterly by the Audit Committee, which may demand additional independent data if necessary.
• Be benchmarked against at least two similar third-party transactions, where available, to ensure fair pricing.
• Be excluded from deliberation and voting by interested directors, major shareholders, and their connected persons.

The Audit Committee, comprising three members including an independent chairman, has stated that the existing review procedures are sufficient to prevent any disadvantage to the company or its minority shareholders.

Disclosure and Transparency Requirements

INNOPRISE will disclose the aggregate value of RRPT in its annual report, including the nature and parties involved. Any transaction value exceeding the approved estimate by 10% or more must be immediately announced to Bursa Malaysia.

Shareholder and Market Implications

• Price Sensitivity: The scale of RRPT—particularly the crude palm oil and palm kernel sales, as well as the new fertiliser purchases—makes this mandate material. Any issues in execution, or adverse changes in the terms or counterparties, could significantly affect INNOPRISE’s revenue and profitability.
• Conflict of Interest Management: The abstention of interested parties from voting and deliberation is a crucial governance safeguard, but investors should monitor any changes in the shareholding structure or the execution of these RRPT for potential conflicts of interest or governance lapses.
• Operational Continuity: The mandate will allow INNOPRISE to continue its business without frequent EGM interruptions, which is positive for operational efficiency and may reduce administrative expenses.

Next Steps and Shareholder Action

The resolution will be voted on at the 32^nd AGM. Shareholders unable to attend can appoint a proxy. Interested directors and major shareholders, as well as their connected persons, will abstain from voting. The company has committed to annual reviews and renewal of the mandate at each subsequent AGM.

Conclusion

The renewal and expansion of the RRPT mandate is a significant event for INNOPRISE, given the scale of transactions involved and the number of related parties. Investors should note the potential for impact on business performance, both positive (via streamlined operations and continued relationships with key counterparties) and negative (if execution or governance issues arise).

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult professional advisers before making any investment decisions related to Innoprise Plantations Berhad.

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