PUC Berhad Seeks Shareholder Approval for New Mandate on Recurrent Related Party Transactions

Key Developments:

• Shareholders to Vote on New Mandate: PUC Berhad (“PUC” or “the Company”) will be seeking shareholder approval at its 27^th Annual General Meeting (AGM) on 24 June 2026 for a new shareholders’ mandate to enter into recurrent related party transactions (RRPTs) of a revenue or trading nature.
• Nature of Transactions: The RRPTs involve a range of services and financial transactions between PUC and entities in which certain directors have significant interests, including outsourcing of key management functions, moneylending, tenancy, and financial support.
• Potential Price Sensitivity: The mandate, if granted, will allow PUC to continue engaging in RRPTs without seeking shareholder approval for each transaction, potentially affecting the company’s operational flexibility, cost structure, and relationships with related parties.

Details of the Proposed Shareholders’ Mandate

PUC is requesting a general mandate from shareholders to allow the Group to enter into RRPTs in the ordinary course of business, provided that such transactions are made at arm’s length, on normal commercial terms, and are not more favourable to related parties than to the public. The transactions must not be detrimental to minority shareholders.

The validity of the mandate, if approved, will last until the next AGM, the expiration of the period for holding the next AGM, or until it is revoked or varied by shareholders.

Principal Activities Involved

PUC is primarily an investment holding company. Its subsidiaries’ activities include management consultancy, media and advertising, cybersecurity, moneylending, payment services, e-commerce, IT consultancy, and investment holding across Malaysia, Singapore, the British Virgin Islands, and Hong Kong.

Summary of Recurrent Related Party Transactions (RRPTs)

Noteworthy: Mr. Cheong Chia Chou, Group Managing Director and CEO of PUC, is a common shareholder and director in PUC, RVEMY, RCOMY, and PWMY. He holds 4.76% in PUC, 100% in RVEMY and RCOMY, and 35.22% in PWMY.

Key Operational and Financial Points

• The outsourcing of finance, legal, and operational functions to related parties is a cost-saving measure, enabling PUC to access senior-level expertise without maintaining a full in-house team.
• Moneylending facilities and interest-free advances from related parties are being used to support short-term working capital needs, avoiding higher third-party financing costs.
• All RRPTs are conducted on arm’s length terms, with oversight by the Audit and Risk Management Committee (ARMC) and are subject to annual disclosure and review.
• No outstanding amounts due from related parties have exceeded the agreed credit terms as of 31 December 2025.

Material Contracts and Litigations

The Company reported several material contracts in the past two years, including MoUs with Shenzhen Zhuoxi Innovation Technology for EV imports (April 2024), the (since terminated) proposed acquisition of Alevate Capital and Solutions (June 2024, December 2024), and several sales and acquisitions of software/intellectual property and shareholdings. Investors should note these transactions as they indicate active restructuring and strategic business initiatives.

Material Litigation: Associate company Presto Mall Sdn. Bhd. is subject to a winding-up petition over a RM4.7 million claim by Celcom Mobile Sdn. Bhd. The Board has stated that the Company has fully impaired its investment in Presto Mall and is in the process of disposing of its shareholding, thus the litigation is not expected to have a material adverse effect on PUC’s financials.

Shareholder and Director Interests

• Cheong Chia Chou, as an interested director, will abstain from all Board deliberations and voting on the RRPT mandate. He will also ensure that persons connected to him abstain from voting at the AGM.
• Other directors (except the interested director) recommend voting in favour of the mandate, citing operational efficiency and cost benefits.

Share Price Sensitivity and Investor Considerations

• The approval of this mandate allows PUC to operate with greater agility, particularly in routine transactions with related parties, reducing the need for frequent shareholder approvals and thus operational delays.
• While such mandates are common in Malaysian-listed companies, the scale and nature of the RRPTs (notably the outsourcing of core management functions and the use of related-party financing) could have significant implications for transparency, minority shareholder protection, and corporate governance.
• Any breaches, increases in RRPT values above estimates, or changes in mandates will require immediate Bursa Malaysia announcement, which could trigger share price movements.
• The presence of ongoing and terminated M&A activity, as well as active litigation at associate level, adds to the Company’s risk profile and may affect investor sentiment.

Important Dates

• AGM Date: 24 June 2026, 10:00 a.m. at Dewan Tunku, Kelab Golf Negara Subang, Jalan SS7/2, Petaling Jaya, Selangor.
• Proxy Submission Deadline: 22 June 2026, 10:00 a.m.

Conclusion

The proposed mandate, if approved, will support PUC’s ongoing operational model and could positively impact cost structure and operational efficiency. However, investors should closely monitor related party transactions for governance risks, as well as the outcome of ongoing associate-level litigation and the Company’s broader restructuring efforts.

Disclaimer: This article is provided for informational purposes only and does not constitute financial advice or an offer to buy or sell any securities. Investors should conduct their own due diligence and consult professional advisors before making investment decisions. The information contained herein is based on materials disclosed by PUC Berhad as of 30 April 2026 and may be subject to change.

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