MMS Ventures Berhad: Key Shareholder Proposals Ahead of 22nd AGM

MMS Ventures Berhad (“MMSV”) has released its Circular to shareholders, outlining two major proposals to be tabled at its upcoming 22nd Annual General Meeting (AGM) on 22 May 2026. These proposals could significantly influence the company’s operations, governance, and potentially its share price. Below is a detailed breakdown of the content and implications for investors and shareholders.

1. Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions (RRPT)

• Nature of RRPT: MMSV seeks approval to renew the mandate allowing its group (including subsidiaries) to enter into recurrent related party transactions of a revenue or trading nature. These are necessary for the day-to-day operations and are conducted on terms not more favourable to related parties than to the public.
• Scope of Transactions:
  • Provision of tooling and machining services by Micro Carbide Engineering Sdn Bhd (MCE) to Micro Modular System Sdn Bhd (MMS), a subsidiary.
  • Renting of factory space by MMS to MCE (including maintenance and utility charges).
  • Provision of design and engineering support by MMS to MCE.

  The estimated value of these RRPTs for the coming mandate period is RM8 million.

• Key Related Parties:
  • Directors and major shareholders involved include Sia Teik Keat (CEO), Goh Kim Hock, Tan Beng Cheong, Teoh Soo Kuang, Kuan Goot Kheng, and Sim Goay Hoon.
  • Some of these parties are both directors and major shareholders in MMSV and MCE, indicating significant overlap in interests.
• Review Procedures:
  • All RRPTs are reviewed by the Audit Committee, with procedures to ensure transactions are at arm’s length and not detrimental to minority shareholders.
  • Interested directors and major shareholders abstain from deliberations and voting on these matters.
• Financial Effects: The renewal of the RRPT mandate is not expected to affect the issued share capital, earnings per share, or net assets per share. However, it facilitates operational efficiency and avoids the need for frequent shareholder approvals, which can be costly and time-consuming.
• Price Sensitive Consideration: Close relationships and substantial transactions with related parties can raise governance concerns. Investors should monitor the execution and disclosure of RRPTs to ensure transparency and fairness.

2. Proposed Renewal of Share Buy-Back Authority

• Scope: MMSV seeks authority to buy back up to 10% of its issued shares, to be funded from retained profits (RM4.1 million as at FY2025).
• Methods of Dealing with Bought-Back Shares:
  • Cancel the shares, thus reducing the share capital.
  • Retain the shares as treasury shares for potential distribution as dividends or resale on Bursa Malaysia.
  • Retain part as treasury shares and cancel the remainder.
• Potential Impact:
  • If the buy-back is implemented in full and all shares are cancelled, issued shares would drop from 196,319,720 to 176,687,748.
  • Public shareholding spread could decrease from 50.45% to 44.95%, but must remain above the 25% minimum required by Bursa Malaysia.
  • Buy-back may positively affect earnings per share (EPS) if shares are cancelled, making the stock potentially more attractive.
  • Buy-back may stabilise share price during periods of market volatility.

  Price Sensitivity: Share buy-back exercises typically support share prices and may signal management confidence, but could reduce cash available for dividends and investment.

• Risks:
  • Reduction in working capital and opportunity cost of capital.
  • Potential increase in gearing if funded by borrowings.
  • Possible reduction in future dividend payouts as buy-back can only be funded from retained profits.
• Recent Buy-Back Activity: MMSV bought back 1,583,600 shares in the past 12 months, with no resale or cancellation of treasury shares. As of 24 March 2026, 11,122,575 shares are held as treasury shares.
• Share Price History: Shares traded between RM0.230 and RM0.665 in the past year, with the latest price at RM0.270.
• Take-Over Code Compliance: The Board does not intend to trigger a mandatory take-over offer; none of the directors or major shareholders currently hold more than 33% of voting shares.

3. Governance & Voting Guidance

• Interested Directors and Major Shareholders: Will abstain from voting on resolutions where they have an interest. They will also ensure connected persons abstain.
• Recommendation: The Board (excluding interested parties) recommends shareholders vote in favour of both proposals, viewing them as being in the best interests of the company and its shareholders.
• AGM Details:
  • Date: 22 May 2026
  • Time: 10:00 am
  • Venue: Plot 84A, Lintang Bayan Lepas 9, Bayan Lepas Industrial Park, Phase 4, 11900 Penang
  • Proxy Form deadline: 20 May 2026, 10:00 am

Implications for Shareholders & Investors

• Both proposals are significant:
  • The RRPT renewal allows ongoing related party dealings, supporting operational efficiency but also requiring careful oversight.
  • The share buy-back authority could impact share liquidity, capital structure, and price, especially if implemented aggressively.
• Shareholders should consider:
  • The governance safeguards in place for RRPTs.
  • The financial implications and potential for share price movement due to buy-back activity.
  • The company’s rationale for these proposals, including market stabilization, capital management, and operational synergies.
• Both proposals, if approved and executed, could be price sensitive and may influence investor sentiment and MMSV’s share price, especially given the overlap between key directors and major shareholders in related party dealings.

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