On Thursday, 14 April 2022 at 9.01 pm, Spackman Entertainment Group Limited (SEGL), released its notice of annual general meeting to be held by electronic means on Friday, 29 April 2022 at 3 pm. The annual report was released two minutes later. The independent auditor, Baker Tilly TFW LLP, had issued a qualified opinion for the company’s financial statements for the year ending 31 December 2021.
In its notice, SEGL stated that all questions to be submitted by shareholders must be received by the company no later than 5 pm on 18 April 2022. Shareholders are to pre-register by 5 pm on 22 April 2022 to attend the virtual AGM, and all proxy forms for voting must be received by 3 pm on 27 April 2022, or 48 hours before the time of the AGM.
The Securities Investors Association (Singapore) (SIAS) submitted a list of questions related to the AGM presumably on or before 18 April (SEGL said they were received on 18 April). On 28 April at 8.23 pm, SEGL published its response to the questions from SIAS – or nearly 30 hours after the voting deadline.
SIAS asked a number of questions, including about the delay in the release of the independent reviewer’s report and the early cut-off for shareholders to ask questions. Coincidentally, I had on 25 April 2022, published a post titled “Spackman Entertainment: Losing the Plot” on my website questioning why SGX Regco is giving the company so much time to complete the independent review and publish the report. My post followed six other articles and updates I had published from June 2018 to March 2021 on my website which were mainly about the five share purchase and sale and share swap transactions which resulted in the increase in the stake in SEGL’s Hong Kong associate, Spackman Media Group Limited (SMGL).
Regarding the early cut-off for shareholders to ask questions, SIAS wrote (as reproduced by the company):
“Q4. The company’s cut-off for shareholders to submit the question is 5:00 pm on 18 April 2022. It is noted that 15 April 2022 is a public holiday in Singapore. Essentially, the company has only given shareholders a single working day to review the auditor’s comments, the discrepancies between the unaudited and audited accounts, the notice of meeting and the 161-page annual report before submitting their questions by the deadline….
i. Can the independent directors help shareholders understand the reasons for the early cut-off? Did the directors consider it reasonable to give such short notice?”
This is the company’s response, reproduced in full:
“Based on the AGM guidelines published by SGX online dated 16 December 2021, and as advised by our corporate secretary and sponsor, ‘All substantial and relevant questions received from shareholders prior to a general meeting, should be publicly addressed by the Board of Directors and/or management at least:-
(i) 48 hours prior to the closing date and time for the lodgement of the proxy forms, if the notice of general meeting is to be sent to shareholders at least 14 calendar days before the meeting; and
(ii) 72 hours prior to the closing date and time for the lodgement of the proxy forms, if the notice of general meeting is to be sent to shareholders at least 21 calendar days before the meeting.’
In this case our lodgement of proxy forms for our AGM & EGM would be on the 27 April and at least 48 hours/72 hours prior which would be 23 or 24 April for the Company to publish its answers by shareholders.
In view of the above guidelines, the timeline was discussed and reviewed with the corporate secretary and sponsors to ensure compliance with SGX requirements.
No shareholders questions were received as of the date of the cut-off date.”
Shareholders may have been busy praying for a miracle at SEGL over that Easter weekend.
SEGL seemed to have missed a few lines from the script (I mean, SGX’s AGM guidelines). It omitted the following from those guidelines:
“…issuers which do not utilise both (i) real-time remote electronic voting and (ii) real-time electronic communication at their general meetings, should incorporate the practices below in their conduct of general meetings, in addition to the checklist set out in the Guidance. This will take effect for any notice of general meeting served after 1 January 2022…”
One of those guidelines states: “After the publication of the notice of general meeting, shareholders should be allowed at least 7 calendar days to submit their questions.” (emphasis mine)
SEGL did not utilise remote electronic voting or real-time electronic communication at its AGM. Did the continuing sponsor, RHT Capital, and the company secretary, advise SEGL about this “7-day” guideline?
SIAS also asked: “Since this practice does not appear to be in line with SGX requirements and guidance, would the board be pushing back the cut-off to give shareholders the time to review the material?”
The company said: “Yes, even though the cut-off is on 18 April 2022, shareholders may still send their feedback and questions to info@spackmanentertainment.com”.
But the responses to the questions from SIAS, including the above reply, were only published at 8.23 pm on 28 April 2022 – or the night before the AGM to be held at 3 pm the following day – and 10 days after the company said it had received the questions from SIAS.
The end credits had already started rolling by then.
SEGL conducted an AGM without complying with SGX guidelines and without giving shareholders a reasonable opportunity to ask questions.
It remains to be seen whether SGX Regco will take any action in relation to this farcical AGM, the delay in the independent review, and any questionable transactions that have taken place.
