Widad Group Berhad: Key Details from Proposed Shareholders’ Mandate and Legal Proceedings

Overview

Widad Group Berhad (“Widad” or “the Company”) has issued a comprehensive circular to shareholders in relation to the proposed renewal of shareholders’ mandate for recurrent related party transactions (RRPT) of a revenue or trading nature. The resolutions for this proposal will be tabled as special business at the Company’s 17th Annual General Meeting (AGM), scheduled for 25 June 2026.

Key Highlights for Investors

• Purpose of the Mandate: The shareholders’ mandate seeks approval for Widad and its subsidiaries to continue entering into RRPTs with related parties, necessary for day-to-day operations. These transactions are to be conducted at arm’s length and on commercial terms that are not more favourable to the related parties than those available to the public, and not detrimental to minority shareholders.
• Classes of Related Parties: The mandate covers a wide range of related parties, including Widad Business Group Sdn Bhd (WBG) and its many subsidiaries, as well as various entities directly or indirectly controlled or connected to major shareholders and directors, especially Tan Sri Muhammad Ikmal Opat Bin Abdullah and his family.
• Scope of Transactions: The RRPTs primarily involve the provision of construction and integrated facilities management services, infrastructure, civil works, and property management. The estimated transaction values for the coming mandate period are not specified due to the variable nature of project composition and values.
• Review Procedures: The Group has established procedures to ensure all RRPTs are properly reviewed. The Audit Committee will conduct regular reviews and interested parties will abstain from deliberation and voting on relevant matters. If procedures are deemed inadequate, a fresh mandate will be sought.
• Rationale: The recurring transactions are integral to Widad’s business, supporting daily operations and leveraging longstanding relationships with related parties, ensuring procurement and service reliability and continuity.

Legal Matters – Price Sensitive Information

Several ongoing legal disputes and winding-up petitions involving Widad’s key subsidiary, Widad Builders Sdn. Bhd. (WBSB), are detailed in the circular. These matters are material and may have an impact on the Company’s financial position and, consequently, its share price.

• Winding-Up Petition from ST Tunnel (M) Sdn. Bhd.:
  WBSB faces a winding-up petition over an unpaid adjudicated amount (over RM1.57 million plus costs and interest) following a dispute relating to a subcontracted sewerage project. The High Court has ordered payment, and a hearing on the winding-up petition is scheduled for 30 June 2026. The outcome remains uncertain, and no provision has been made in the financial statements.
• Winding-Up Petition from Sany Construction (M) Sdn. Bhd.:
  WBSB is also subject to a winding-up petition from Sany Construction (M) Sdn. Bhd. over an unresolved adjudicated amount exceeding RM6.25 million. Partial payment has been made, but negotiations have failed and the petition is pending in the High Court. The financial impact is undetermined, and no provision has been recognised.
• Legal Proceedings with Menta Construction Sdn. Bhd.:
  WBSB is contesting another adjudication award for RM3.46 million plus costs and interest. Garnishee proceedings are underway to recover a total of approximately RM4.28 million. Appeals are scheduled for July 2026, and the outcome is uncertain with no provision recognised.
• Legal Proceedings with Hikmat Duta Sdn. Bhd.:
  A provision of RM3.12 million has been recognised following an adverse adjudication and High Court decision related to a dispute over rescue works at a water treatment plant project.

Shareholding and Director Interests

Key Management Interests: Tan Sri Muhammad Ikmal Opat Bin Abdullah, a major shareholder and director, holds a direct and indirect interest totalling 13.67% in Widad through WBG. His spouse and children, as well as his brother, are also involved as directors or shareholders in various related parties. All interested parties will abstain from voting on the relevant resolutions at the AGM.

Potential Share Price Impact

• The ongoing legal proceedings and winding-up petitions present significant uncertainty and potential downside risk for Widad’s share price, given the potentially material financial liabilities involved.
• The proposed renewal of the RRPT mandate is routine for Widad’s operations and is not expected to have a direct impact on EPS, net assets per share, or share capital if transactions remain on arm’s length terms. However, any escalation in related party transactions or adverse court outcomes could impact investor confidence and share value.
• Investors should monitor the outcomes of the scheduled court hearings in 2026 and any subsequent financial disclosures or announcements by the Company.

Important Dates

• 17th AGM Date and Time: 25 June 2026, 10:30 a.m., Kuala Lumpur Golf & Country Club (KLGCC).
• Deadline for Proxy Form Submission: 23 June 2026, 10:30 a.m.

Documents Available for Inspection

Investors may inspect Widad’s Constitution, the last two years’ audited financial statements, and the latest unaudited consolidated financial results at the Company’s registered office during normal business hours up to and including the AGM date.

Conclusion

The proposed renewal of the shareholders’ mandate for RRPTs is a crucial part of Widad’s operational flexibility, but the multiple ongoing legal proceedings with potentially significant liabilities are key risk factors. Shareholders and potential investors should closely monitor the Company’s announcements and AGM outcomes, as these issues may materially affect Widad’s financial health and share price.

Disclaimer: This article is intended for informational purposes only and does not constitute investment advice. Investors are encouraged to conduct their own research or consult their professional advisers before making investment decisions. The outcome of ongoing legal proceedings and related party transactions may significantly affect Widad Group Berhad’s business, financial performance, and share price.

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