GO Hub Capital Berhad: In-depth Review of Proposed New Shareholders’ Mandate for Recurrent Related Party Transactions (RRPTs)

Executive Summary

GO Hub Capital Berhad (“GOHUB”) has issued a circular to shareholders detailing its intention to seek approval for a new shareholders’ mandate. This mandate concerns recurrent related party transactions (RRPTs) of a revenue or trading nature, which are considered necessary for the company’s day-to-day operations. The resolution will be tabled at the upcoming Fourth Annual General Meeting (4th AGM) scheduled for 26 June 2026.

Key Points of the Mandate

• Purpose: The mandate allows GOHUB Group to engage in RRPTs with specified related parties, primarily TMAS Sdn. Bhd., for the supply, delivery, installation, and maintenance of Terminal Operating System hardware and software.
• Scope: Transactions include hardware (Access Control Gate, Ticket Vending Machine, Passenger Information Display System) and software (Centralised Ticketing System, Terminal Operating System, cloud hosting, transactional charge) supply and maintenance.
• Value: Estimated aggregate value for hardware transactions up to RM10.0 million and software/hardware maintenance up to RM5.0 million for the period between the forthcoming 4th AGM and the next AGM.
• Shareholder Approval: The mandate requires annual renewal, with full disclosure in the annual report for transactions meeting or exceeding the prescribed thresholds.
• Related Parties: Involvement of major shareholders and directors, notably TCT International, GHSB, Tan Cherng Thong, and Lee Li Yee, all with significant shareholdings or directorship positions.
• Internal Controls: Stringent review procedures are in place to ensure RRPTs are conducted on arm’s length terms, not prejudicial to minority shareholders, and comparable to market rates.
• Transparency: Immediate announcements to Bursa Securities are required if actual RRPT values exceed estimates by 10% or more. All interested parties must abstain from voting on the resolution.

Details Investors Should Know

• Potential Price Sensitivity:
  • If RRPTs significantly increase in value or frequency, this could impact GOHUB’s revenue streams and cost structures, potentially affecting financial performance.
  • The mandate facilitates rapid execution of necessary transactions, supporting operational continuity and efficiency, especially for TMAS terminal upgrades.
  • Involvement of connected directors and major shareholders means governance and transparency are crucial; any perceived conflicts of interest or lapses in internal controls could negatively impact investor confidence and share price.
  • No material contracts or litigation exist that could affect the company’s financial position, as confirmed by the Board.
• Voting and Participation:
  • Interested directors and major shareholders (and their connected persons) must abstain from voting to ensure impartiality.
  • Shareholders are encouraged to participate in the AGM or appoint proxies, with clear deadlines for submission.
• Mandate Validity:
  • The mandate, if approved, remains in force until the next AGM, expiration as mandated by law, or revocation/variation by shareholder resolution.
  • Annual renewal and full disclosure in subsequent annual reports are required.
• Review and Controls:
  • Audit and Risk Management Committee has reviewed and approved the internal controls and monitoring procedures.
  • Regular quarterly reviews and comparisons with unrelated third-party transactions ensure fairness and transparency.
• Financial Impact:
  • The mandate is not expected to affect share capital, substantial shareholders’ holdings, earnings per share, net assets, or gearing.

Implications for Shareholders and Share Price

The new RRPT mandate is a double-edged sword:

• On one hand, it enables GOHUB to pursue growth and operational upgrades without cumbersome shareholder approvals for each transaction, supporting efficiency and potentially improving profitability.
• On the other hand, the involvement of major shareholders and directors in related transactions could raise concerns about conflict of interest, especially if controls fail or if RRPT values materially exceed estimates.

Investors should monitor annual reports and Bursa announcements for any increases in RRPT values, unexpected changes, or governance issues, as these could have a material effect on share value.

Board Recommendation

The Board (excluding interested directors and connected persons) recommends shareholders vote in favour of the mandate, citing operational necessity, established working relationships, and the technical capabilities of the Group.

Further Information

Shareholders may inspect the company’s Constitution and audited financial statements at GOHUB’s registered office during normal business hours up to the date of the 4th AGM.

Conclusion

The approval of this new RRPT mandate is likely to streamline operations and facilitate growth for GOHUB. While it is not expected to immediately impact share capital or earnings, it is a governance matter investors should watch closely, as any lapse in transparency or controls could become price-sensitive.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult professional advisers before making any investment decisions related to GO Hub Capital Berhad.

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