Panda Eco System Berhad Proposes Shareholders’ Mandate for Recurrent Related Party Transactions

Key Developments That Investors Should Watch

Panda Eco System Berhad (“Panda” or “the Company”), a technology solutions provider listed on the ACE Market, has issued a detailed circular outlining its intention to seek shareholders’ approval for both the renewal of existing and new shareholders’ mandates. These mandates cover recurrent related party transactions (RRPTs) of a revenue or trading nature, which are integral to the company’s day-to-day operations and growth strategy.

Main Highlights of the Circular

• Renewal of Existing Shareholders’ Mandate: Panda seeks to renew its existing mandate for RRPTs, initially approved on 26 May 2025. This mandate will expire at the conclusion of the upcoming Fourth Annual General Meeting (AGM) unless renewed.
• New Shareholders’ Mandate: The Company is also requesting approval for additional recurrent related party transactions not previously covered, reflecting the Group’s expanding business activities and relationships.
• Date of the AGM: The crucial vote will take place at the Fourth AGM scheduled for 25 May 2026, 10:00 a.m. at Ames Hotel Melaka. Shareholders may attend in person or via proxy.
• Nature of Transactions: The RRPTs primarily involve the purchase of IT hardware and software, rental of office space, and acquisition of application software solutions and related services from companies and individuals closely associated with Panda’s major shareholders and directors.

Details of the RRPTs and Parties Involved

The transactions include dealings with entities such as E-Tech IT Sdn. Bhd., Goldcoin Pavilion Sdn. Bhd., Symple Apps Sdn. Bhd., and Day One Solutions Sdn. Bhd. Notably, the interested parties include key directors and major shareholders:

• Loo Chee Wee and Tay Kheng Seng: Both are Executive Directors and Major Shareholders of Panda, and have indirect interests in several transacting companies.
• Cheok Kian Hing: Non-Independent Non-Executive Chairman, also holds direct and indirect stakes in some of the related parties.
• Goldcoin Capital Sdn. Bhd.: Major Shareholder with a 67.43% stake in Panda.

Types of transactions covered:

• Purchase of computer hardware, point-of-sale equipment, servers, and software solutions
• Rental of office premises in Melaka, Kuala Lumpur, and Ampang from directors or entities controlled by them
• Acquisition of AI-enabled application software solutions and technical services to enhance the Group’s retail management ecosystem

Financial and Operational Implications

• Materiality: Some of the planned RRPTs have significant values, e.g., up to RM2 million for hardware purchases and up to RM500,000 for software solutions per transaction period.
• Impact on Financials: While the mandates themselves do not immediately affect share capital, earnings, net assets, or gearing, the transactions enabled by these mandates could support operational efficiency, technology upgrades, and business expansion.
• Strategic Rationale: The main justification for these mandates is to streamline approval processes for frequently recurring transactions, ensure continuity in supply and services, and leverage longstanding business relationships for mutual benefit.
• Governance and Minority Shareholder Protection: The company emphasizes that all RRPTs will be conducted on an arm’s-length basis, at market rates, and will not be more favorable to related parties than to third parties. Interested directors, major shareholders, and their connected persons will abstain from voting, with compliance monitored by the Audit and Risk Management Committee.

Price-Sensitive Factors and Considerations for Shareholders

• Potential Share Price Impact: The renewal and expansion of RRPT mandates could be viewed positively, as they facilitate strategic partnerships and operational agility. However, investors should closely monitor the aggregate value and terms of these transactions for any indication of preferential treatment or governance risks.
• Transparency and Oversight: The company has outlined robust internal controls, including quarterly reviews by the Audit and Risk Management Committee and requirements for market-based pricing.
• Major Shareholder Influence: Goldcoin Capital’s dominant stake (over 67%) means the interests of this shareholder and its connected directors are highly aligned with the company’s strategic direction, but also pose potential risks if governance lapses occur.
• Disclosure Commitments: Panda will disclose the aggregate value and nature of all RRPTs in its annual reports, as required by Bursa Malaysia listing rules.
• Material Contracts: Investors should also note that the company recently completed a material acquisition of Gross Synergy Sdn. Bhd. and Day One Technology Sdn. Bhd. for RM17.1 million, which expands the Group’s technology services and may affect future RRPTs.

What Shareholders Need to Do

• Review the Circular: Shareholders are urged to read the full circular, which details all transacting parties, transaction values, and governance measures.
• Vote at the AGM: Your vote on the mandates is crucial. If you are an interested party or connected person, you must abstain.
• Monitor Annual Reports: Subsequent annual reports will provide updates on the actual aggregate value of RRPTs.

Conclusion

The proposed renewal and expansion of shareholders’ mandates for RRPTs at Panda Eco System Berhad is a significant development that could streamline the company’s operations, enhance its technological capabilities, and support its growth. However, the transactions involve key insiders and are therefore subject to regulatory scrutiny and investor oversight. The outcome of the AGM and the company’s execution of these transactions may influence investor sentiment and the company’s share price, especially if any issues of governance or preferential treatment arise.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Shareholders and investors are advised to conduct their own due diligence and consult their professional advisors before making any investment decisions related to Panda Eco System Berhad.

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