OCR Group Berhad Proposes Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions

Date: 30 April 2026

Summary

OCR Group Berhad (“OCR” or “the Company”) has issued a circular to its shareholders proposing the renewal of its mandate for entering into recurrent related party transactions (RRPTs) of a revenue or trading nature at the upcoming 28th Annual General Meeting (AGM) scheduled for 10 June 2026.

Key Points in the Report

• The renewal of the shareholders’ mandate is necessary for OCR Group and its subsidiaries to continue entering into RRPTs with related parties in the ordinary course of business, in line with Bursa Malaysia’s Main Market Listing Requirements.
• The proposed mandate covers a broad range of transactions, including marketing fees, construction contracts, property rentals, and billboard advertising, with estimated transaction values running into hundreds of millions of Ringgit for the coming year.
• The mandate, if approved, will remain in effect until the next AGM, unless revoked or varied by shareholders earlier.
• Extensive disclosure of RRPTs, related parties, and the nature of these transactions, including details of amounts transacted, outstanding receivables, and the procedures in place for review and approval of RRPTs, have been provided to ensure transparency and protect minority shareholders.
• Key related parties include entities controlled or significantly owned by major shareholder and Group Managing Director, Ong Kah Hoe (“OKH”), and his family members.
• Specific RRPTs include construction contracts worth up to RM386 million, property rental agreements, and marketing fees as high as RM10 million per project.
• As of 31 December 2025, outstanding RRPT receivables exceeding credit terms stood at RM31.8 million, arising from major completed projects (YOLO and The Pano).
• Procedures for RRPT review and approval are in place, including abstention from decision-making by interested parties and oversight by the Audit and Risk Management Committee.
• The Board (except interested directors) recommends shareholders vote in favour of the mandate, citing administrative efficiency and business expediency.
• Material litigation and contracts are disclosed, including a lawsuit involving a subsidiary (OMISB) with claims and counterclaims amounting to more than RM100 million, and a material property sale of RM45 million.
• Proposed acquisition of a 49% stake in Chester Properties Sdn Bhd via share issuance at RM0.041 per share, subject to due diligence and definitive agreement.

Details Investors and Shareholders Must Note

• RRPTs Involving Major Shareholders: The bulk of RRPTs involve companies directly or indirectly controlled by OKH and his family, including construction contracts, marketing fees, and property rentals. This concentration of transactions could impact governance and raise related party risk concerns for investors.
• Significant Transaction Values: Construction contracts with related parties could reach RM386 million (Vertex Kuantan City Centre) and RM400 million (logistics hub in Shah Alam) in the coming mandate period. Any deviation in terms, execution, or collectability could materially affect OCR’s financials.
• Outstanding Receivables: As at LPD, RM31.8 million remains outstanding from related party contracts, with final accounts pending. The management is monitoring these receivables closely, but any delay or default could impact cash flow and earnings.
• Material Litigation: OMISB, an OCR subsidiary, is pursuing claims of RM66 million and RM4.4 million against former contractors, who are counterclaiming RM40 million. The outcome of this case could have a significant impact on OCR’s financial statements and share price.
• Material Property Transaction: Sale of a 4.58-acre development parcel in Shah Alam for RM45 million by OCR Avenue Sdn Bhd (OCRASB) could provide a financial boost, subject to successful completion.
• Corporate Action – Chester Properties: OCR has entered into a heads of agreement to acquire a 49% stake in Chester Properties Sdn Bhd, to be paid by new OCR shares at RM0.041 each. This could dilute existing shareholders but may also bring in new assets and business opportunities, subject to due diligence.

Shareholder Protections and Voting

• Interested directors, major shareholders, and persons connected to them are required to abstain from deliberating and voting on the proposed mandate, both at the Board and shareholder level.
• The Audit and Risk Management Committee will continue to monitor RRPT procedures annually and may request additional safeguards if needed.
• Shareholders are urged to carefully review the circular and consider the implications of the mandate, especially the concentration of related party dealings, outstanding receivables, and ongoing litigation.

Potential Share Price Impact

• The scale of related party transactions, material litigation, and significant property and corporate deals disclosed in this circular are all potentially price-sensitive. Positive resolution of receivables or litigation, successful property sales, or accretive acquisitions could support the share price. Conversely, adverse outcomes could weigh on investor sentiment and valuation.

Conclusion

OCR Group Berhad’s upcoming AGM and the proposed renewal of the RRPT shareholders’ mandate are critical for the company’s operations and financial outlook. Investors should closely monitor the outcome of the AGM, the progress of material litigation and contracts, and the company’s ability to manage related party risks and outstanding receivables.

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 conduct their own due diligence or consult with a professional advisor before making any investment decisions. The information herein is based on company disclosures as of the date stated and may be subject to change.

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