NOVA MSC BERHAD
5 Jul 2004
|Subject||NOVA MSC BERHAD (“NMSC” OR THE “COMPANY”)
– PROPOSED SHAREHOLDERS’ RATIFICATION FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE (“PROPOSED SHAREHOLDERS’ RATIFICATION”); AND
– PROPOSED SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE (“PROPOSED SHAREHOLDERS’ MANDATE”)
(COLLECTIVELY REFERRED TO AS “THE PROPOSALS”)
Contents :1. INTRODUCTION
On behalf of the Board of Directors of NMSC (“Board”), OSK Securities Berhad (“OSK”) wishes to announce that the Company is intending to seek the approval of its shareholders for the Proposed Shareholders’ Ratification and Proposed Shareholders’ Mandate for recurrent related party transactions (“Recurrent Transactions”) of a revenue or trading nature at the forthcoming Extraordinary General Meeting (“EGM”), to be held after the adjournment or conclusion of the Annual General Meeting (“AGM”) at a date to be determined.
A circular and notice of EGM containing the detailed information on the Proposals, upon approval by Bursa Malaysia Securities Berhad (“Bursa Malaysia”), will be issued to the shareholders in due course.
2. DETAILS OF THE PROPOSALS
NMSC and its subsidiaries (“NMSC Group” or “Group”) are principally involved in the following businesses:-
(a) key software R&D centre and intellectual property owner;
(b) sale and marketing of application software for the e-Government and healthcare industries; and
(c) provision of domain-specific IT professional services in the e-Government and healthcare industries.
The Group enters into Recurrent Transactions with certain related parties in its ordinary course of business which are necessary for its day-to-day operations and which are on terms no more favourable to the related parties than those generally available to the public.
In accordance with Rule 6.6 of the Listing Requirements of Bursa Malaysia for the MESDAQ Market (“MESDAQ Market Listing Requirements”), all Recurrent Transactions require the approval of the Company’s shareholders at a general meeting to be convened for the purpose, either prior to the related party transaction being entered into, or prior to the completion of the related party transaction.
Further to the above, the Board proposes to obtain their shareholders’ mandate for its Recurrent Transactions to be entered into by the Group from the period commencing from the conclusion of NMSC’s forthcoming EGM, whichever is later, up to the date of the next AGM of the Company to be held in 2005 (“Proposed Mandate Period”). The Proposed Shareholders’ Mandate is subject to annual renewal and as such, approval of the shareholders for a renewal of the Proposed Shareholders’ Mandate will be sought at each subsequent AGM of the Company.
In addition, the Board proposes to seek the shareholders’ approval for the Proposed Shareholders’ Ratification for Recurrent Transactions already entered into by the NMSC Group, from the date of its listing on 19 August 2003 until its forthcoming EGM (“Proposed Ratification Period”).
3. RATIONALE FOR THE PROPOSALS
The principal businesses of the Group are the provision of application software and services for the healthcare and e-government industries. A majority of the classes of the related parties are involved substantially, if not principally, in one or more of these businesses. It is therefore in the interests of the Group to transact with such related parties (in addition to their transactions with third parties in the ordinary course of business) so that the Group can enjoy synergistic benefits. Given the complementary nature of the activities of the members of the Group and the activities of the related parties, as well as the fact that such activities are in the ordinary course of business of both the Group and the related parties, it is anticipated that the Recurrent Transactions would occur on a frequent and recurrent basis.
In addition, the Recurrent Transactions entered or to be entered into are undertaken at arm’s length on normal commercial terms and on terms no more favourable to the related parties than those generally available to the public
The Proposed Shareholders’ Ratification will ratify the Recurrent Transactions not mandated by the shareholders of NMSC, which has been entered into during the Proposed Ratification Period.
The Proposed Shareholders’ Mandate will enable NMSC and/or its subsidiaries to pursue business opportunities, which are time-sensitive in nature, and will eliminate the need to announce and to convene separate general meetings on each occasion to seek prior approval of the shareholders for the Recurrent Transactions. This will substantially reduce the expenses associated with the convening of general meetings on ad hoc basis, improve administrative efficiency and allow manpower resources and time to be channeled towards attaining other corporate objectives.
4. FINANCIAL EFFECTS OF THE PROPOSALS
The Proposals are not expected to have any effect on the net tangible assets per share and earnings per share of the Company. The Proposals will also have no effect on the share capital of NMSC or on its major shareholders’ shareholdings.
5. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED
The interests of the Directors and major shareholders of NMSC in the Proposals will be disclosed in the circular to shareholders in due course.
The Directors of NMSC who are deemed interested in the Proposals will refrain and continue to refrain from Board deliberations pertaining to the Proposals, and will abstain from voting in respect of their direct and indirect shareholdings of NMSC on the resolutions to be tabled at the forthcoming EGM on the Proposals.
The interested Directors and major shareholders of NMSC, as well as persons connected to them will abstain from voting in respect of their shareholdings on the resolutions pertaining to the Proposals at the EGM to be convened.
6. DIRECTORS’ RECOMMENDATION
The Board of Directors, save for the interested Directors, after due consideration of all aspects of the Proposals, is of the opinion that the Proposals are in the best interests of NMSC.
Accordingly, the Board of Directors of NMSC, save for the interested Directors who have abstained from making any recommendation on the Proposals which involve their respective interests, recommends that you vote in favour of the ordinary resolution pertaining to the Proposals at the forthcoming EGM.
7. APPROVAL REQUIRED
The Proposals are subject to the approval of NMSC’s shareholders at an EGM to be convened.
This announcement is dated 5 July 2004.
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