Box-Pak (Malaysia) Bhd. Seeks Shareholder Approval for Renewal of Related Party Transactions Mandate

Introduction

Box-Pak (Malaysia) Bhd. (“Box-Pak” or “the Company”) has issued a circular to its shareholders, seeking approval at its upcoming 52nd Annual General Meeting (AGM) for the renewal of a mandate to conduct recurrent related party transactions (RRPTs) of a revenue or trading nature. The proposal, if approved, will empower Box-Pak to continue entering into necessary business transactions with related parties for another year, subject to annual renewal.

Key Highlights for Investors

• Mandate Scope: The renewal covers transactions such as the sale of cartons by Box-Pak Group to the Can-One Group and the lease of factory buildings from the Can-One Group to Box-Pak Group.
• Estimated Transaction Values: The estimated annual value for the covered RRPTs is RM42 million (RM37 million for carton sales and RM5 million for factory leases) for the period from 23 June 2026 to the next AGM in 2027.
• Major Shareholders and Interested Parties: The transactions involve significant interests by Kian Joo Can Factory Berhad, Can-One International Sdn. Bhd., Can-One Berhad, Eller Axis Sdn. Bhd., and Yeoh Jin Hoe (Group Managing Director of Box-Pak and Kian Joo), among others. These parties collectively control over 54.99% of Box-Pak’s shares indirectly.
• Shareholder Safeguards: The mandate ensures that transactions are conducted on terms not more favourable to related parties than those available to the public, and are not detrimental to minority shareholders. There are strict review and approval procedures involving the Board, Audit and Risk Management Committee (ARMC), and internal audits.
• Price Sensitivity: Given the substantial value of the RRPTs and the involvement of controlling shareholders, investors should be aware that any changes to or rejection of the mandate could materially affect Box-Pak’s revenue streams and operational arrangements.
• Disclosure and Transparency: Any RRPTs exceeding RM1 million or 1% of prescribed ratios will be disclosed in the annual report, and any transaction value exceeding estimates by more than 10% will trigger immediate disclosure to Bursa Malaysia.

Detailed Review of the Proposed Mandate

Background and Rationale

The RRPT mandate, as permitted by Bursa Malaysia’s Main Market Listing Requirements, is essential for Box-Pak’s daily operations, allowing the company to transact efficiently with its related parties without seeking repeated shareholder approval. This is intended to streamline operations, reduce administrative costs, and enable the group to pursue business opportunities more effectively.

Principal Activities and Parties Involved

• Box-Pak Group: Primarily involved in manufacturing and distribution of paper boxes, cartons, board printing, trading of paper rolls, and investment holding. Key subsidiaries include BP MPak Sdn. Bhd., Box-Pak (Hanoi) Co., Ltd., Box-Pak (Vietnam) Co., Ltd., Boxpak (Myanmar) Company Limited, and BP Pak (Singapore) Pte. Ltd.
• Can-One Group: Major shareholder of Box-Pak, involved in can manufacturing, property investment, property development, and trading. Subsidiaries include Aik Joo Can Factory Sdn. Berhad, Kian Joo Can Factory Berhad, and others.

Nature and Value of Transactions

The actual values transacted so far have not exceeded the estimated amounts by more than 10%, which would otherwise require immediate market announcement.

Procedures and Safeguards

• All RRPTs up to RM250,000 must be approved by the Group Managing Director/Executive Director.
• Transactions above RM250,000 and up to RM2 million require Exco Committee approval; those above RM2 million need ARMC and Board approval.
• A Register of RRPTs is maintained, and internal audit reviews are conducted annually.
• At least two comparable transactions with unrelated third parties are used as benchmarks whenever possible.
• Interested directors and controlling shareholders must abstain from voting on the relevant resolutions, and ensure that persons connected with them also abstain.

Implications for Shareholders and Share Price

• Potential Price Sensitivity: The RRPTs represent a significant portion of Box-Pak’s business, especially the RM37 million annual carton sales to the Can-One Group. Disruptions or changes in these arrangements—such as non-renewal or regulatory intervention—could materially affect Box-Pak’s revenue, operations, and share value.
• Governance and Minority Protection: The mandate incorporates mechanisms designed to ensure that transactions are fair and not detrimental to minority shareholders. However, investors should closely monitor adherence to these procedures and any disclosures in future annual reports.
• Material Litigation and Contracts: As at the latest practicable date, Box-Pak confirms that neither it nor its subsidiaries are engaged in any material litigation or have entered into any material contracts (outside the ordinary course of business) within the past two years.

Investor Action Points

• The 52nd AGM is scheduled for Tuesday, 23 June 2026 at 10:00 a.m. at the Conference Room, Lot 4, Jalan Perusahaan Dua, Batu Caves, Selangor.
• Shareholders are encouraged to review the full circular and submit proxy forms no later than 48 hours before the AGM if unable to attend in person.

Board Recommendation

The Board (excluding the interested Director) considers the Proposed Renewal of Mandate to be fair, reasonable, and in the best interest of the Company and its shareholders, and recommends voting in favour of the resolution at the AGM.

Conclusion

The renewal of this mandate is crucial for Box-Pak’s ongoing operations and its ability to transact efficiently with related parties at arm’s length. The outcome of the vote at the AGM could have a direct and material impact on Box-Pak’s future business, revenue streams, and potentially its share price.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should review all materials provided by Box-Pak (Malaysia) Bhd. and consult with their financial advisers before making any investment decisions. The information is based on the latest available documents and is subject to change.

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