Shareholders push back on NationGate’s family perks

WHILE NationGate Holdings Bhd may have been ranked by Fortune as South-East Asia’s fastest-growing company by revenue in 2024, its shareholders did not see this as carte blanche to reward executives due to filial connections.

At its recent AGM in late May, a majority of shareholders voted against the proposal to award share grants and/or share options under the long-term incentive plan (LTIP) to company executives Ooi Xin Ying and Lee See Lun.

Xin Ying, listed as a senior officer, is the daughter of managing director (MD) and controlling shareholder Datuk Ooi Eng Leong, 56.

The latter holds some 48.26% of the outstanding shares in the Penang-based electronic manufacturing services company.

See Lun, acting chief technology officer, is the son of Lee Kim San, executive director and chief operating officer at NationGate.

The elder Lee holds 13 million NationGate shares, or a 0.57% stake, according to the company’s 2024 annual report.

While voting shareholders rejected the proposal to award Xin Ying, the resolution to award Lee was accepted purely because those in favour held a higher number of shares, despite losing in terms of the number of voting shareholders.

Almost 88% of the voting shares were against the motion in Xin Ying’s case, while 75% of voting shares supported awarding See Lun.

By the number of shareholders, 138 rejected the LTIP award for Xin Ying, while 61 voted in favour.

For See Lun, 137 were against the resolution, and 62 were in favour.

The 62 shareholders won the day, likely because MD Ooi would have backed the vote.

Why the majority of shareholders voted against the resolutions is unknown.

It could be due to concerns about conflicts of interest – especially in Xin Ying’s case.

Such proposals often raise concerns that decisions are being made to benefit insiders or their families rather than all shareholders equally.

This could undermine trust in the board’s independence and objectivity, and entrench the power of a family or insider group.

The other eight resolutions at the AGM were passed.