Matex International Faces Shareholder Vote on Major Payouts to Former Directors Amid Corporate Governance Review

Key Points from Matex International’s SGX Response

• Shareholder Approval Required for Cessation Payments: Matex International’s Board and Sponsor have determined that payments totaling S\$678,000 to former directors Dr Tan and Mr Tan constitute “interested person transactions” (IPTs) under Chapter 9 of the Catalist Rules. These payments exceed the 5% threshold of the company’s latest audited net tangible assets (NTA), triggering the need for shareholder approval.
• Extraordinary General Meeting (EGM) Planned: The Board will convene an EGM within 2 to 3 months to seek shareholder approval for the cessation payments. All relevant information will be presented in a circular to shareholders prior to the meeting.
• Potential Consequences if Approval Not Obtained: If shareholders reject the payments, the company will seek further legal advice and consult its Sponsor to ensure compliance with obligations under the settlement agreement with the former directors.
• Corporate Governance and Board Independence Under Scrutiny: The Board addressed queries about the independence of Mr Tan, the newly appointed Non-Executive Independent Chairman, following his initial designation as non-independent due to his indirect interest in RHT Capital, the company’s previous sponsor.
• Sponsor’s Assessment: The Sponsor confirmed that the cessation payments are not exempt and that Mr Tan qualifies as independent, citing his lack of involvement in RHT Capital since 2016, and the relatively minor financial relationship between Matex and RHT Capital post-sponsorship.

Details Investors Must Know

1. Cessation Payments and Shareholder Vote

The payments in question, S\$462,000 to Dr Tan and S\$216,000 to Mr Tan, represent a significant outflow for Matex International. Aggregated, they account for approximately 7.49% of the company’s audited NTA of S\$9,049,000 as at 31 December 2024. This exceeds the regulatory threshold and requires explicit shareholder approval. If the vote fails, the company faces potential legal and regulatory challenges in fulfilling the settlement agreement with the former directors.

2. Settlement Agreement and Compliance Risks

The company is legally bound by a settlement agreement with Dr Tan and Mr Tan, which requires full compliance, including convening shareholder meetings and adhering to all regulatory requirements. Failure to secure shareholder approval could jeopardize this agreement, potentially exposing the company to further litigation, reputational risk, or regulatory penalties.

3. Board Independence and Governance Reforms

Board composition has shifted following resignations and appointments after the company’s EGM in September 2025. Notably, Mr Tan was initially designated non-independent due to prudence regarding his indirect stake in RHT Capital. However, upon reassessment, both the Board and Sponsor concluded Mr Tan meets the independence criteria under the Code of Corporate Governance and Catalist Rules. The Sponsor’s view was supported by Mr Tan’s lack of operational involvement in RHT Capital since 2016 and the limited financial dealings between Matex and RHT Capital.

4. Potential Price Sensitivity

The outcome of the shareholder vote on the cessation payments could materially affect investor sentiment and share price. Approval could be viewed as a significant cash outflow and raise concerns over corporate governance and stewardship of shareholder funds. Rejection could lead to protracted legal disputes and uncertainty over the company’s obligations under the settlement agreement. Additionally, the scrutiny over board independence and sponsor relationships may impact perceptions of governance quality and future regulatory compliance.

What’s Next for Matex International?

• EGM Timeline: Investors should expect the EGM within 2-3 months, with detailed disclosures in the circular prior to the meeting.
• Governance Watch: Ongoing assessment of board independence and regulatory compliance will be critical as the company navigates these issues.
• Regulatory Oversight: The Singapore Exchange Regulation (SGX RegCo) is actively monitoring Matex’s compliance and governance practices.

Conclusion

Matex International is at a pivotal juncture, with substantial cessation payments to former directors under shareholder scrutiny and board independence being reassessed. These developments present material risks and opportunities for investors, with potential implications for the company’s financial position, governance standards, and share price trajectory.

Disclaimer: This article is for informational purposes only and does not constitute financial advice or a recommendation to buy or sell securities. Investors should conduct their own due diligence and consult professional advisors before making investment decisions. The information presented is based on company disclosures as of 13 October 2025 and may be subject to change.

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