Author: Mak Yuen Teen

If Datapulse shareholders keep the current board but reject the proposed diversification plan, there are still many ways that the board can destroy shareholder value without shareholders having any say.

In fact, a company has 12 months from the time it becomes a cash company, together with a maximum 6-month extension. So, it has 18 months. There was absolutely no need for the company to buy the new business one day after the new board was formed and no need for the directors to be discussing it about two weeks before they were even appointed as directors because of a deadline imposed by the vendor.

Shareholders should vote in the proposed directors, who can then do a proper study before a proper diversification plan is put to shareholders for approval (or cash is returned to shareholders). The new board can also review whether issues about the trademarks and other matters would constitute “irregularities, deficiencies or material adverse events” that would trigger the buyback clause requiring the vendor to buy back Wayco. I believe that unwinding the Wayco acquisition would be in the best interest of the company.

The KPMG report did not in any way say that the independent directors at China Yongsheng did what was expected of independent directors.