TNG Fintech’s Alex Kong admitted to the Central Bank of Malaysia that its USD115 million Series A funding never materialised
KUALA
LUMPUR, MALAYSIA – Media
OutReach – 23 December 2019
– The minority shareholders of
Malaysian fintech company, Tranglo Sdn Bhd (Tranglo) have filed an oppression
suit against TNG Fintech Group Inc (TNG Fintech), which acquired its 60 per
cent equity in Tranglo from government-link, private equity fund management
company, Ekuinas in October 2018.
Defendants
also named in the suit are Alexander Kong King Ong (also known as Alex Kong),
Wong Wing Chi (also known as Takis Wong), co-founder of Tranglo Sia Hui Yong
and Tranglo Sdn Bhd. Both Kong and Wong sit in the board of Tranglo as TNG
Fintech’s representatives after the acquisition.
The
suit came about after a series of events that materially impeded business
operations, including TNG Fintech’s rejection of Tranglo’s approved financing
plan and unreasonable delay in signing up new bank partners.
TNG
Fintech also attempted to install Alex Kong’s sister as a required signatory of
all bank accounts maintained by Tranglo. In addition, Kong and Wong rejected a
dividend payout to shareholders despite the company’s healthy performance.
Six
repeated requests by minority shareholders for a shareholder agreement to be
signed were refused by TNG Fintech represented by Kong and Wong. TNG Fintech is
registered in the British Virgin Islands, based in Hong Kong and controlled by
Alex Kong.
Kong’s
previous business ventures, Next Millennium Sdn Bhd and Asia Travelmart Sdn
Bhd, were wound up by the government of Malaysia and Technology Park Malaysia
Sdn Bhd for non-payment of taxes and rental respectively.
Kong
also had a track record of two personal bankruptcies, one in Malaysia and
another in Hong Kong.
Whilst
TNG Fintech had issued a statement on 11 September 2017 on its completion of a
USD115 million Series A funding, Kong admitted in an email on 8 April 2019 to
the Central Bank of Malaysia (Bank Negara Malaysia) that this funding never
materialized.
The
suit was brought about by Impiro Asia Ltd and Mohammad Hassan Rasheed
Gharaybeh, who collectively hold 13.6 per cent equity in Tranglo. During the
acquisition process, TNG Fintech via Kong, had given commitment and assurances
to Bank Negara Malaysia that it will acquire the minority stake by 1 February
2019.
Simon
Landsheer, Director at Impiro Asia Ltd said, “Banks in Malaysia have flagged
and queried why we have a director (Alex Kong) with bankruptcy history. And
now, the situation at Tranglo has worsened to the extent that the management
and staff time are tied up responding to requests from Kong under the claim of
executing his fiduciary duty on Tranglo. Requests such as for information to be
supplied and in specific format in a short turnaround time do not contribute to
productive operations and as such, Tranglo might miss its USD3 billion
processing value target by 2020.”
“In
addition to impeding business operations, the negotiations to acquire our
minority stake were also not conducted in good faith. All five proposals
received require the minority shareholder to relinquish board representation
the moment the Share Sales Agreement is signed. The proposed payment structures
were dependent on TNG Fintech’s initial public offering in the United States,
of which has not happened as claimed by Alex Kong. Based on Kong’s actions,
attempts to remove and treatment of directors representing minority interest
and his history, we have no confidence in TNG Fintech’s proposed initial public
offering and the true value of the shares to be swapped,” stated Landsheer.
The
minority shareholders are seeking for dividends to be paid and Tranglo to be
wound up due to the untenable working relationship with TNG Fintech.
The issuer is solely responsible for the content
of this announcement
