JAG Berhad Proposes Renewal of Shareholders’ Mandate and Share Buy-Back Authority

Introduction

JAG Berhad has issued a comprehensive circular and statement to shareholders ahead of its upcoming Twenty-Eighth Annual General Meeting (AGM) scheduled for Tuesday, 26 May 2026. The company is seeking shareholder approval for two major proposals:

• Renewal of Existing Shareholders’ Mandate for Recurrent Related Party Transactions (RRPT)
• Renewal of Authority for Share Buy-Back of up to 10% of Total Issued Share Capital

Key Points for Investors

1. Proposed Renewal of Shareholders’ Mandate for RRPT

• This mandate allows JAG Group to enter into recurrent related party transactions necessary for day-to-day operations, specifically renovation and refurbishment works at Wisma JAG by Smart Home Buddy Sdn. Bhd. (SHBSB), a company connected to key directors and major shareholders.
• The estimated aggregate value of these transactions for the upcoming year is RM1.6 million, down from the previous estimate of RM2.6 million, with an actual value transacted in the past year of RM355,976.
• The RRPTs are subject to strict review procedures, including price benchmarking against at least two third-party quotations to ensure fairness and prevent terms more favourable to related parties than those available to the public.
• The Audit Committee has reviewed and is satisfied with the procedures, confirming they are sufficient to prevent detrimental effects to minority shareholders.
• Shareholder approval for this mandate is required annually, and interested directors and major shareholders (notably Dato’ Ng Aik Kee and Dato’ Ng Meow Giak) will abstain from voting, along with persons connected to them.
• The rationale cited for engaging related parties includes operational efficiency, familiarity with JAG’s requirements, and reduced administrative burden. These RRPTs are recurring and time-sensitive, making it impractical to seek approval for each transaction individually.
• The mandate, if approved, will streamline operations and potentially avoid delays in property upkeep and refurbishment, supporting asset value and operational continuity.

2. Proposed Renewal of Share Buy-Back Authority

• JAG seeks authority to repurchase up to 10% of its issued shares (currently up to 75,529,749 shares, assuming no conversion of outstanding Warrants C, or up to 112,104,207 shares if all Warrants C are exercised).
• As of the latest practicable date (LPD), JAG has already purchased and holds 58,379,292 shares as treasury shares.
• Funding for buy-backs will be from internally generated funds and/or bank borrowings, subject to solvency tests and the availability of retained profits. As of 28 February 2026, retained profits at company level are negative (RM -4.9 million), while group-level retained profits are positive (RM 57.3 million).
• The buy-back price is capped at 15% above the five-day weighted average market price, and resale/transfer of treasury shares is subject to Bursa Malaysia guidelines.
• JAG’s public shareholding spread is currently 48.69%, well above the minimum 25% required for continued listing.
• Purchased shares may be cancelled, held as treasury shares, distributed as share dividends, resold, or used for employee share schemes or corporate transactions.
• Potential benefits include stabilisation of share price, prevention of unwarranted volatility, improved capital structure, increased EPS if shares are cancelled, and flexibility in rewarding shareholders with share dividends.
• Potential disadvantages include reduced financial resources for future investments and lower cash available for dividend distribution.
• In the previous twelve months, JAG purchased 21 million shares for RM5.68 million, with no resales or transfers of treasury shares.
• Share buy-back will affect the share capital, NA, EPS, and dividend rate, depending on the magnitude and treatment of repurchased shares.
• The company intends to ensure no shareholder is required to make a mandatory general offer due to increased shareholding as a result of buy-backs.
• The monthly share price ranged from RM0.200 to RM0.340 in the past year. The last transacted price was RM0.330.

Shareholder Considerations and Price Sensitivity

• Share Buy-Backs: The renewal of the buy-back authority is potentially price sensitive. Share buy-backs may support the share price by reducing supply, stabilising volatility, and increasing EPS if shares are cancelled. Investors should monitor announcements for actual buy-back activity, as aggressive repurchases could signal undervaluation or management confidence.
• RRPTs: The renewal of the RRPT mandate ensures operational continuity and asset upkeep but is not expected to materially affect financials given the relatively modest amounts involved. Nonetheless, the involvement of major shareholders and directors in the related party transactions may be of interest to those concerned about governance and transparency.
• Financial Health: The company-level retained profits are in deficit, which may limit buy-back activity unless profits recover or alternative funding is secured. Investors should pay attention to quarterly results for updates on the financial position.
• Voting and Abstentions: Major shareholders and directors involved in related party transactions will abstain from voting, ensuring minority shareholder protection.
• Dividend Policy: Share buy-backs may result in higher dividend rates if the quantum of dividends remains constant, but could also reduce cash available for dividends.
• Corporate Actions: Any significant buy-back or RRPT activity will be announced to Bursa Malaysia, enabling investors to track developments that may impact share valuation or trading sentiment.

AGM Details

The 28th AGM will be held at Danau 1 & 2, 1st Floor, Kota Permai Golf and Country Club, Shah Alam, on Tuesday, 26 May 2026 at 10:00 a.m. Shareholders unable to attend in person are encouraged to submit proxy forms at least 48 hours in advance.

Summary for Investors

The proposals for renewal of RRPT mandate and share buy-back authority are typical annual corporate actions but may be price sensitive due to their potential impact on share supply, EPS, and trading sentiment. The RRPT involves related parties but is governed by robust review procedures. Share buy-back authority, if exercised, supports the share price and offers flexibility in capital management and shareholder rewards.

Disclaimer

This article is prepared for informational purposes only and does not constitute investment advice or a recommendation to buy, sell, or hold shares in JAG Berhad. Investors should conduct their own analysis and consult professional advisers before making any investment decisions. The information herein is based on public documents and may be subject to change or updates. No liability is accepted for any loss arising from reliance on this article.

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