Saturday 1 November 2008

E3 Holdings Fires Founder Over Poison Pen Letters

Catalist-listed E3 Holdings yesterday fired its founder Liau Beng Chye, saying there was evidence he was involved in poison pen letters sent to the company in September.

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Guanyu said...

E3 Holdings Fires Founder Over Poison Pen Letters

By CHEW XIANG
31 October 2008

Catalist-listed E3 Holdings yesterday fired its founder Liau Beng Chye, saying there was evidence he was involved in poison pen letters sent to the company in September.

The move comes just five days before E3’s annual general meeting when Mr. Liau - now a non-executive director - is up for re-election to the board.

E3, formerly known as Ei-Nets, said it had engaged Deloitte and Touche as special auditor to investigate and also a commercial firm to conduct computer forensic investigations.

The computer firm’s preliminary findings showed there was evidence of Mr. Liau’s involvement in the poison letters, E3 said. The company terminated his service agreement yesterday afternoon on the grounds of misconduct and material breaches and said it has asked him to resign as a director.

Last night, Mr. Liau questioned the validity of his dismissal and told BT the service agreement pertains to his appointment as an executive director of the company, an appointment he held until July this year. ‘Only the shareholders have the right to make me step down,’ he said.

He also said he did not write the letters and had made a police report when company officials earlier this month seized his notebook to check for evidence.

Describing his relationship with elements of the company’s management as hostile, Mr. Liau said he had questioned management repeatedly after $20 million raised by the company through a series of share issues was sent to China to fund E3’s oil refinery and real estate projects there.

On Oct 14, E3’s auditors Deloitte and Touche flagged over $26 million in receivables, saying it had received insufficient evidence to conclude the amounts were recoverable. Deloitte also said it had not been able to obtain sufficient appropriate evidence to provide a basis for an audit opinion on the company’s full-year financial statement released on Aug 29.

Some of the accounts Deloitte highlighted relate to payments made to companies controlled by Kenneth Ngo, brother of E3’s non- executive chairman Peter Ngo. Mr. Kenneth Ngo was formerly a general manager of the company.

Some angry shareholders who plan to vote against the company’s chief executive and chairman when the two are put up for re-election at E3’s annual general meeting on Tuesday are supporting Mr. Liau in the tussle.