Turbo-Mech Berhad Proposes Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions

Key Highlights from the Circular

• Company: Turbo-Mech Berhad (“Turbo”)
• AGM Date: 25 May 2026, 2:30 p.m., Agate Room, M World Hotel, Petaling Jaya
• Proposal: Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions (“RRPT”) of a revenue or trading nature
• Mandate Period: From 25 May 2026 until the conclusion of the next AGM or as otherwise specified in the resolution

Background and Purpose

Turbo-Mech Berhad, an investment holding company with several operating subsidiaries in the sales of rotating equipment, spare parts, and provision of maintenance and overhaul services, is seeking shareholder approval for the renewal of an existing mandate. This mandate authorizes the company and its subsidiaries to enter into Recurrent Related Party Transactions (RRPTs) that are necessary for day-to-day operations. These transactions are conducted in the ordinary course of business and are subject to annual renewal and disclosure requirements.

Details of the Proposed RRPT Mandate

• Compliance: The RRPTs must be conducted on arm’s length terms, not more favourable to related parties than those generally available to the public, and must not be detrimental to minority shareholders.
• Disclosure: The company will disclose the aggregate value of such transactions and the names and relationships of related parties in the annual report, especially if the actual value exceeds the estimate by 10% or more.
• Shareholder Safeguards: Interested directors, major shareholders, and persons connected to them must abstain from voting on the resolutions pertaining to these mandates.

Key Related Parties & Transactions

Note: These related parties are either associates or joint ventures of Turbo-Mech, and the actual value of transactions may vary based on business needs and market rates.

Review and Safeguards

• All RRPTs undergo rigorous review to ensure pricing and terms are not more favourable to related parties than to independent third parties.
• At least two comparative quotes are sought where practical, and all transactions above RM1 million require Board approval from non-interested directors.
• The Audit Committee reviews these transactions quarterly and has confirmed that current review procedures are adequate to safeguard minority shareholders’ interests.
• No amounts due from related parties as at 31 December 2025 exceeded normal credit terms.

Rationale and Potential Impact for Investors

• Business Necessity: These transactions are vital for Turbo-Mech’s operations, revenue generation, and to maintain longstanding business relationships with related parties who provide technical expertise and products on short notice.
• Operational Synergy: The RRPTs support Turbo Group’s competitive positioning and ability to pursue time-sensitive business opportunities.
• Administrative Efficiency: Shareholder approval for the mandate reduces the need for repeated general meetings to approve each transaction, freeing up resources to focus on business growth.
• Financial Impact: The mandate itself is not expected to have a material effect on the company’s share capital, earnings per share, net assets, or major shareholding structure, but the underlying RRPTs are a significant contributor to revenue and profits.

Directors’ Interests and Corporate Governance

• Key directors and interested parties, namely Gan Kok Ten and Omar Bin Mohamed Said, and persons connected to them, will abstain from all deliberations and voting on the resolution related to the RRPT mandate.
• All other directors recommend that shareholders vote in favour of the resolution, citing the mandate as being in the best interests of the company.

Shareholder Action Required

• Shareholders are encouraged to review the full details of the proposal in the Circular and Annual Report.
• The ordinary resolution for the mandate will be tabled as Special Business at the 17th AGM. Shareholders who cannot attend may appoint a proxy.
• Proxy forms must be submitted at least 48 hours before the AGM.

Additional Information

• No material contracts or litigation, other than in the ordinary course of business, have been entered into or are pending that would affect the financial position of Turbo-Mech Berhad.
• Shareholders can inspect the constitution and audited accounts at the registered office during business hours until the AGM date.

Potential Price Sensitive Information

• The renewal of these mandates allows Turbo-Mech to continue significant business dealings with related parties, with estimated aggregate transaction values up to RM20 million in the next financial year, directly impacting revenue and potentially earnings.
• Any deviation of actual RRPT values exceeding 10% of estimates will trigger an immediate Bursa Malaysia announcement, which could be price sensitive depending on the magnitude and nature of the transactions.

Disclaimer: This article is a summary and interpretation of Turbo-Mech Berhad’s circular to shareholders. It does not constitute investment advice. Readers and investors should review the full official circular and consult with professional advisers before making investment decisions. The company’s share price may be influenced by the approval or rejection of the proposed mandate, as well as the actual value and nature of related party transactions undertaken.

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