Watta Holding Berhad Seeks Shareholder Approval for Renewal of Related Party Transactions Mandate

Key Points for Investors

• Watta Holding Berhad (“Watta” or “the Company”) is seeking shareholder approval at its upcoming AGM on 3 June 2026 for the proposed renewal of its existing mandate to conduct recurrent related party transactions (RRPT) of a revenue or trading nature.
• The transactions involve several related parties, including companies controlled by or associated with major shareholders and directors such as Dato’ Lee Foo San, Datin Teoh Lian Tin, their family members, and other directors.
• The RRPT cover a wide range of activities crucial to the day-to-day operations of the Watta Group, including leases of office premises, purchases and sales of telecommunication and electronic devices, service maintenance, repairs, and travel-related arrangements.
• The estimated aggregate value of the RRPT for the period from 3 June 2026 until the next AGM could reach up to RM 69.7 million, encompassing various large-scale transactions mainly with Zitron, Hello Station, Midland Network, and Z’tronic.

Details of the Proposed RRPT Mandate

The renewal of the RRPT mandate is designed to facilitate business as usual for Watta Group without the need for repeated shareholder approval for each transaction, thereby streamlining operations and reducing administrative costs and delays.

The transactions are required to be conducted on arm’s length terms, not more favourable to the related parties than to the public, and are subject to annual renewal and rigorous internal review and oversight by the Audit Committee and Board of Directors.

Classes of Related Parties and Their Relationships

• Z’tronic Holidays Sdn Bhd (“Z’tronic”) – provides tour and ticketing services. Dato’ Lee Foo San and family members hold directorships and substantial shareholdings.
• Zitron Enterprise (M) Sdn Bhd (“Zitron”) – distributes and retails telecommunication products, gadgets, and leases office premises. Major shareholders include Dato’ Lee Foo San and Datin Teoh Lian Tin.
• Hello Service Centre (M) Sdn Bhd – involved in servicing and repairs of mobile phones. Controlled by Dato’ Lee Foo San and Datin Teoh Lian Tin.
• Hello Station (M) Sdn Bhd – distributes and retails mobile phones, connected through shareholdings in Zitron.
• Midland Network Sdn Bhd – distributes telecommunication products, majority-owned by Dato’ Lee Foo San and family.

The mandate covers a variety of transactions, including leases, purchases, sales, and service arrangements, all of which are essential for the core operations of the Watta Group.

Nature and Estimated Value of Transactions

Note: The actual values transacted up to 1 April 2026 have not exceeded the previously estimated values by 10% or more. There are also no amounts due and owing by the related parties to Watta Group that exceeded the credit terms granted.

Governance, Internal Controls, and Safeguards

• Approval and Review: All RRPT transactions are subject to strict internal controls and approval thresholds. Transactions below RM500,000 are approved by a non-interested director. Transactions at or exceeding RM500,000 require Audit Committee review and Board approval.
• Quarterly Review: The Audit Committee will review all RRPT on a quarterly basis, with the option to seek independent advice or professional valuations as necessary.
• Internal Audit: Periodic internal audits will ensure compliance with established procedures. Any divergence is reported to the Audit Committee.
• Abstention from Voting: Interested directors and major shareholders (including Dato’ Lee Foo San, Datin Teoh Lian Tin, Lee Fook Sin, Lee Foo Hock, Hj. Ahmad Bin Khalid, and Lee Li Yen) will abstain from voting and deliberation on the RRPT at both board and general meetings. They have also undertaken to ensure that persons connected with them do the same.
• Ongoing Monitoring: Procedures are in place to ensure all RRPT are transacted at market rates, compared with third-party quotes, and not detrimental to minority shareholders.

Potential Price-Sensitive and Material Information for Shareholders

• Magnitude of Transactions: The large estimated aggregate value (up to RM69.7 million) of RRPT for the coming year is significant relative to Watta’s business scale and may impact revenue recognition and operational performance.
• Related Party Influence: The substantial involvement of Dato’ Lee Foo San and family in both Watta and the counterparty companies may raise governance considerations. However, the company has outlined robust procedures to mitigate conflict of interest risks.
• No Material Litigation or Adverse Contracts: As at the date of the circular, the Watta Group is free from material litigation and there are no material contracts outside ordinary business that may impact financials.
• Shareholder Approval Required: The renewal of the RRPT mandate is subject to shareholder approval at the AGM on 3 June 2026. Failure to obtain approval may disrupt normal operations and delay transactions with key suppliers and service providers.
• Financial Impact: The mandate is not expected to have an immediate effect on the company’s share capital, earnings, or net assets.

Board and Audit Committee Statements

• The Audit Committee has confirmed that the current guidelines and review procedures for RRPT are sufficient, adequate, and will be reviewed as required.
• The Board (excluding interested directors) recommends shareholders vote in favour of the proposed mandate as it is deemed to be in the best interests of the Company.

Important Dates for Shareholders

• AGM: 3 June 2026, 9:00 a.m. at Alhambra Ballroom, Level M1, Hotel Melia Kuala Lumpur.
• Proxy Deadline: Forms of Proxy must be lodged by 9:00 a.m., 1 June 2026, to the Share Registrar’s Office.

Documents Available for Inspection

Shareholders may inspect the following at Watta’s registered office during business hours until the AGM:

• Company Constitution
• Audited financial statements for FY2024 and FY2025
• The Lease Agreement with Zitron dated 5 March 2026

Conclusion

The proposed RRPT mandate renewal is a critical resolution for Watta’s ongoing business operations. It involves significant transactions with entities linked to key directors and major shareholders. Shareholders should carefully consider the implications, particularly regarding corporate governance, operational continuity, and the potential for these transactions to influence future revenue and earnings. The Board and Audit Committee affirm strong oversight mechanisms are in place to protect shareholder interests and ensure transparency.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy, hold, or sell securities. Investors are encouraged to review the full circular and consult with professional advisers before making investment decisions regarding Watta Holding Berhad.

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