Power struggle unfolds at DFCity

DFCITY Group Bhd’s sudden move towards an attempted boardroom purge – including the removal of an independent director – raises questions about corporate governance, shareholder intent and the balance of power in the small-cap listed company.

A group of shareholders holding 12.09% has requisitioned an EGM to remove three directors with immediate effect, including independent non-executive director Chong Yuen Shuen.

Strikingly, one of the requisitioning shareholders, Fong Yik Hon, is also an independent non-executive director, appointed on Aug 1, 2025

Even more notable, the trio is seeking to remove any directors appointed to fill casual vacancies before the meeting is held.

No reasons were provided. That silence is the problem.

Independent directors are meant to be the last line of defence for minority shareholders, tasked with challenging management and overseeing related-party transactions, among other responsibilities.

Their role is also critical in ensuring decisions are made in the company’s best interest, not merely for the benefit of dominant shareholders.

Removing one without explanation inevitably fuels speculation: Was the independent director obstructing certain proposals?

Did they raise concerns about particular transactions?

The inclusion of Datuk Dr Li Wei in the removal list adds another layer of complexity.

As both a non-independent director and a substantial shareholder, his position straddles management and ownership.

Is this EGM an attempt to dilute his influence? Or is it part of a broader struggle for control of DFCity, a barely profitable dimension stones manufacturer?

For a company with a market capitalisation of just RM42mil and thin trading liquidity, such governance turbulence can be destabilising.

Minority shareholders, meanwhile, are left in the dark.

Several questions demand answers. Why these three directors? Why now? Who stands to benefit from a reconstituted board?

And most critically, what safeguards will remain for minority shareholders if independent voices are sidelined?

In capital markets, perception matters almost as much as fundamentals.

DFCity’s silence, and the shareholders’ refusal to articulate their rationale, may prove costlier to investor confidence than any boardroom disagreement itself.