Key Points in the Report

• Shareholders’ Mandate Proposal: MSB Global Group Berhad plans to seek approval at its Second Annual General Meeting (2nd AGM) for a new shareholders’ mandate concerning recurrent related party transactions (RRPTs) of a revenue or trading nature.
• Meeting Details: The 2nd AGM is scheduled for Friday, 5 June 2026 at Sofitel Kuala Lumpur Damansara. Shareholders are encouraged to vote in person or via proxy.
• Scope of Mandate: The mandate will allow MSB Global and its subsidiaries to conduct RRPTs with related parties, provided these transactions are on normal commercial terms and not more favourable to related parties than to the public, and are not detrimental to minority shareholders.
• Classes of Related Parties: Includes Directors, Major Shareholders, and Persons Connected to them, with specific companies and individuals named in the report.
• Nature of RRPTs: Includes rental expenses for offices/factories and sales of automotive lubricants, fluids, parts, and components.
• Review Procedures: Comprehensive internal controls and audit procedures have been established to ensure RRPTs are conducted at arm’s length and disclosed appropriately.

Detailed Insights for Investors

1. Background and Rationale

MSB Global Group Berhad is seeking a new shareholders’ mandate to facilitate RRPTs between its subsidiaries and related parties. This move is designed to streamline operational efficiency, reduce administrative burdens, and enable the Group to carry out transactions necessary for day-to-day operations without convening separate general meetings each time an RRPT arises.

The rationale behind the mandate is to improve business operations, create mutual benefits within the Group, and leverage familiarity with related parties for more informed commercial decisions. The mandate is subject to annual renewal and extensive disclosure requirements.

2. Principal Activities and Related Parties

MSB Global is an investment holding company. Its subsidiaries include:

• MSB Machinery: Marketing, trading, and distribution of car spare parts, lubricants, fluids, and related products.
• GSP Industry: Similar activities focusing on automotive spare parts.
• FK Fukuoka Chemicals: Manufacture of refined petroleum products.

Key related parties include Datuk Ow Kee Foo (Managing Director and substantial shareholder), Ow Chen Lun (Executive Director and substantial shareholder), Datin Yong Mui Kim, and YMH (key senior management and family member of other directors).

3. Details and Value of RRPTs

The RRPTs under the proposed mandate include:

• Rental expenses for offices and factories in Johor, Kuala Lumpur, and Kuantan, owned by Datuk Ow Kee Foo or Antara Tegas Sdn Bhd (where DOKF is a director/shareholder).
• Sales of automotive lubricants, fluids, parts, and components to Damai Auto Enterprise (sole proprietor is spouse of YMH).

Actual and estimated transaction values:

• Rental expenses range from RM6,500 to RM35,000 monthly, with total annual estimates up to RM441,000 for some properties.
• Sales to Damai Auto Enterprise estimated at RM450,000 for lubricants/fluids and RM150,000 for automotive parts/components in the coming year.

These values are significant for a company of MSB Global’s size and could have material impact on cash flows and operational metrics.

4. Governance and Review Procedures

MSB Global has instituted rigorous internal review procedures:

• Transaction prices and terms must be market-driven and mutually agreed, with comparisons to unrelated third-party transactions where possible.
• Transactions exceeding RM1 million require Board approval by non-interested directors; smaller transactions can be approved by the Executive Director or Board.
• Regular audits and quarterly reviews by the Audit and Risk Management Committee (ARMC) ensure compliance with internal guidelines and Bursa Malaysia requirements.
• Interested directors and connected persons must abstain from deliberations and voting on RRPTs.

5. Potential Price-Sensitive Information

Material Contracts: The report discloses several material contracts, including:

• Option and tenancy agreements for properties with escalating rental rates (up to 10% annual increase based on market rates).
• Acquisitions of MSB Machinery (RM13.77 million) and GSP Industry (RM21.57 million) completed in December 2024.
• Underwriting agreement for IPO shares (up to 2.5% commission).
• Joint Venture Agreement with Thai Sin Anant Rubber Factory for exclusive distribution rights in Thailand, which could unlock new revenue streams.

Impact on Share Value:

• The proposed mandate could enhance operational efficiency and cost management, positively impacting earnings and margins.
• Significant related party transactions, especially with major shareholders, may raise concerns about governance and fairness, potentially affecting investor sentiment.
• New joint ventures and completed acquisitions signal growth ambitions and could be price-sensitive if they materially affect future earnings.
• Any material changes to RRPTs or breaches of internal controls could trigger announcements to Bursa Malaysia, impacting share price volatility.

6. Shareholder Actions and Approvals

Shareholders must vote on the ordinary resolution for the proposed mandate at the 2nd AGM. Interested directors and persons connected will abstain from voting. The mandate is subject to annual renewal and will lapse at the next AGM unless renewed, or if revoked by shareholders.

Disclosure of RRPTs will be made in the Annual Report 2025, including breakdowns by transaction type and related parties.

Conclusion & Recommendations

The proposed shareholders’ mandate for RRPTs is a key governance matter that enables MSB Global Group Berhad to continue necessary related party transactions efficiently. Investors should closely monitor these RRPTs, the Group’s compliance with internal controls, and the impact of recent acquisitions and joint ventures on future financial performance.

Any material changes, breaches, or unexpected developments in RRPTs could be price-sensitive and affect the Group’s share value. The Board (excluding interested directors) recommends voting in favour of the mandate, citing operational efficiency and shareholder benefits.

Disclaimer

This article is based on information provided in MSB Global Group Berhad’s circular to shareholders and other publicly disclosed documents. It does not constitute investment advice. Investors should conduct their own due diligence and consult professional advisors before making any investment decisions. The author and publisher accept no liability for any losses arising from reliance on this article.

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