Henn Tan, former chairman of Trek 2000 International , and his son Wayne Tan, the current executive chairman of the company, have received a letter of demand from substantial shareholder Ron Sim.
According to Trek 2000, Sim, best known as the founder of the Osim lifestyle products company, alleges that Henn and the company made "fraudulent misrepresentations" when Sim invested in Trek 2000 back in June 2015.
Sim further alleges that he has been "treated unfairly and contrary to his legitimate expectations as a minority shareholder".
As indicated in Trek 2000's annual report, as at March 28, Sim held nearly 28.4 million shares, or 9.06% of the company, which makes him the third largest shareholder.
Back in June 2015, Sim, via his then-listed entity Osim International, paid 43.65 cents each for 26 million new Trek 2000 shares, bringing its total stake to 8.75%.
That investment cost around $11.35 million then. Based on Trek 2000's Dec 11 closing price of 7.2 cents, Sim's total stake of 28.4 million shares is now worth just over $2 million.
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Wayne is the largest shareholder with a direct interest of 20.18% and an indirect interest of 14.16%, giving him control over 34.34%. Japan's Kioxia Corp holds the second largest stake at 16.84%, which includes an indirect interest of 2.72%.
Creative Technology, another listed company, is a substantial shareholder of Trek 2000 too, with a stake of 8.78% held via a subsidiary called CTI II.
In October 2022, Henn was sentenced to 16 months' jail for accounting fraud.
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According to the police, Henn and several other company executives were in a conspiracy to falsify Trek 2000's financial statements between November and December 2015.
"The board is of the view that the allegations have no basis and this legal matter is of no relevance to Mr Wayne Tan during the period of share purchase," the company adds.
Wayne, according to his LinkedIn profile, joined Trek 2000 back in 2012 as a strategic business development manager. He was made group president and executive director in May 2018 after Henn stepped down.
According to Trek 2000, Wayne has hired a lawyer to handle the legal matter as he plans to "take all appropriate steps to vigorously contest" this matter.
