The Malaysian Insider

SINGAPORE, Nov 5 — A decade ago, investor Lui Chee Meng sank S$30,000 (RM73,414) into what he thought was a safe blue-chip company backed by Temasek Holdings.

Now, he has lost almost all the cash he put into Chartered Semiconductor Manufacturing, the world’s No. 3 chipmaker.

The loss made him so angry that he voted against the S$5.6 billion acquisition of Chartered by a Middle Eastern fund.

But the sale went through anyway, as other shareholders voted overwhelmingly in favour of it yesterday.

The Abu Dhabi government-owned Advanced Technology Investment Company (Atic) is now on track to own Chartered, which runs six plants here employing 6,000 workers.

Lui was one of 115 shareholders who made it a point to attend the meeting and reject Atic’s offer. These dissenting shareholders owned just 0.2 per cent of the company’s shares, far short of the 25 per cent needed to torpedo the deal.

A total of 665 shareholders attended the meeting held at Republic Polytechnic. Chartered will eventually be delisted from the Singapore Exchange.

Atic had unveiled the offer, which includes assuming S$3.1 billion in debt and other obligations, in September.

Chartered has been bleeding red ink for years, in a highly competitive global market where size is seen by analysts as the name of the game.

Lui, whose fate is shared by many other small shareholders of the widely-held stock, lamented: “I already lost so much, it’s not a big deal anymore.”

He was one of the most outspoken critics of Chartered at the extraordinary general meeting.

Tensions were high at some points during the meeting, which lasted under an hour, not counting a catered lunch.

Lui bought Chartered shares at the 1999 initial public offering (IPO) price of S$3.34 a share as he thought it was a sure thing, given the track record of other Temasek-linked companies such as SingTel and DBS Group Holdings.

The shares were later consolidated at 10 for one, so they effectively cost him S$33.40 each. Atic offered S$2.68 a share.

Lui, who declined to give his age or occupation, was considered lucky to pick up Chartered shares then — the IPO, launched at the height of the dot.com fever, was 16 times oversubscribed.

On the first day of trading in 1999, its price shot up more than 50 per cent, climbing to a peak of over S$106 in 2000, taking into account two later share sales and the share consolidation. Then they started a long decline to current levels.

Four of the six minority shareholders who spoke out at a question-and-answer session prior to the vote on the deal appeared to be against it.

Questions raised varied — from the performance of the company to whether Chartered could have secured a better price in view of the improving outlook.

Chartered chairman James Norling tried his best to answer the shareholders amicably though the hostility got to him at one point.

Lui called Chartered chief executive Chia Song Hwee “useless”. Norling said he did “not think this was a question” and called for another question.

In response to another shareholder, who wanted to know if Temasek had profited even as he himself lost money, Norling said he shared their pain. “I bought my shares in 2001, I think I can relate,” he said.

He added that while he did not know if Temasek had come out ahead, it had “stood by (Chartered) every time we needed to raise money. Every single time”.

Despite Lui’s vote, and the efforts of others angry at their losses, the proposal was overwhelmingly passed by the other 549 shareholders, who together held 99.8 per cent of Chartered’s shares.

They included Temasek, Chartered’s No. 1 shareholder with a stake of 62 per cent, which had earlier already pledged its support.

In an interview after the announcement, Chia said the strong vote was a sign that “the board has recommended the right approach for the good of the shareholders and the direction of the company”. There are some other administrative details to work out, but Chia does not expect any other roadblocks.

Atic’s chief executive Ibrahim Ajami said his firm will look at expanding Chartered’s facilities. He said it continues to look for ways to grow, and has not ruled out acquiring other chip making facilities.

Temasek issued a very short statement, which reads in full: “We are pleased with the outcome.” — The Straits Times