TEE International shares jump as high as 31% as ex-CEO seeks 23% stake sale

Stanislaus Jude Chan

SINGAPORE (Sept 17): Shares in TEE International rose as much as 31.4% on Tuesday after former CEO Phua Chian Kin, who is currently under investigation, was reportedly seeking to sell a 23% stake in the company.

After lifting its trading halt on Monday night, shares in TEE International opened at 4.5 cents on Tuesday, up from its Monday close of 3.5 cents.

As of 3pm, the counter is trading 0.7 cent or 20% higher at 4.2 cents with 59.8 million shares changing hands, after hitting as high as 4.6 cents earlier in the morning.

According to the company’s most recent annual report, Phua owned just over 57% of the company.

In a filing last night, Phua was reported to have signed a term sheet to sell 150 million shares he held in the company at 6 cents each to an unknown buyer.

Assuming completion of the sale, Phua would be left with a direct stake of 16.24% and a deemed stake of 6.37% in the company. This means Phua will no longer the single largest shareholder in TEE International.

See: TEE International's ex-CEO Phua Chian Kin to give up control with share sale

The former CEO was relieved of his responsibilities in the Mainboard-listed integrated engineering, real estate and infrastructure group earlier this month after external auditor Deloitte raised a red flag over unauthorised payments totalling $6.55 million.

Phua is alleged to have approved remittances made by TEE International's wholly-owned units, PBT Engineering and Trans Equatorial, between July 2018 and March 2019.

The payments had been made to Phua and Oscar Investment, a company incorporated in the British Virgin Islands and wholly-owned by Phua.

In earlier filings to the Singapore Exchange on Sept 4, TEE International said the board and the executive committee were not aware of the remittances.

As of Aug 29 this year, all the money remitted have been fully repaid to the group.

TEE International on Sept 12 had called for a trading halt to announce that it has appointed PricewaterhouseCoopers Risk Services as an external investigator to look into the matter.

The company also revealed that Phua could be selling his shares in the company to certain third-party purchasers, who have so far not been named.

See: TEE International's ex-CEO allegedly involved in unauthorised payments now in talks for sale of his shares

Amid ongoing investigations, Phua’s younger brother, Phua Boon Kin, who was deputy group managing director, has been appointed interim CEO.

The younger Phua has also taken over his brother’s posts in the executive and nominating committee.

See: TEE International appointing investigator to look into unauthorised payments totalling $6.55 mil

Since the start of the year, shares in TEE International are down 72%.

The group sank to full-year losses of $17.8 million for the FY19 ended May, some 78.2% worse than the net loss of $10.0 million reported a year ago.

In a separate filing to SGX at 12.18pm on Tuesday, TEE International announced one of its wholly-owned subsidiaries was awarded a new contract for engineering and construction works worth approximately $20 million.

This brings the company’s outstanding order book to $416 million to date.