KUALA LUMPUR — For the second time in 18 months, Rapid Synergy Bhd’s controlling shareholder has run afoul of Malaysia’s Securities Commission over the same rule. The question now is whether a pattern has been set.
Yu Kuan Chon, who controls Rapid Synergy (KLSE: 7765), failed to disclose that Chan Weng Fui is a connected party — an employee and long-time associate. The Securities Commission regulations require such disclosure. Chan has been listed in Rapid Synergy’s top 30 shareholders for four straight years, from 2018 through 2021. His holdings fluctuated from 2% to more than 14% of outstanding shares, making him a substantial shareholder by law.
Together, Yu and Chan hold at least 40% of Rapid Synergy. Add in other official related parties — including Yu’s brother and co-director Yu Kuan Huat — and the group may control over half the company’s shares. That is well above the 33% threshold that triggers a mandatory takeover offer to minority shareholders. No such offer was made.
The Securities Commission had already fined Yu and his inner circle on 28 September 2021. The charge then was identical: breach of Section 218(2) of the Capital Markets and Services Act 2007 and Paragraph 4.01(a) of the Rules on Take-overs, Mergers, and Compulsory Acquisitions. The penalty did not stop the behavior.
Chan has worked as IR Director at YNH Property for years. He is not an independent investor. The report identifies him as a “long-time poser” for Yu — someone whose shareholding masks the true concentration of control. Under the rules, a connected person is anyone who acts in concert with a controller. The report states flatly: “There is no question that he is a related party and connected person.”
This is not a technicality. The mandatory takeover rule exists to protect minority shareholders from being trapped in a company controlled by a dominant group that never had to buy them out. If Yu and his circle hold more than a third of Rapid Synergy without making an offer, they are operating outside the framework the Commission set.
The first fine did not change the shareholding structure. The 2021 annual report still showed Chan among the top holders. The pattern continued. Now the Commission is dealing with the same violation from the same people.
Rapid Synergy has not issued a public statement on the matter. The company’s share register, as disclosed in annual reports, shows the facts in plain type. The Commission’s 2021 action is a matter of public record. The current investigation follows the same paper trail.
Minority shareholders in Rapid Synergy have been left in an odd position. They own shares in a company where the controlling group may exceed 50% ownership but has never made a mandatory offer. The rules say they should have had the chance to sell out at a fair price. That chance has not come.
The Securities Commission has not announced further penalties. The 2021 fine was a reprimand and a financial penalty. Whether the second violation brings a stiffer response is not yet known.
Yu Kuan Chon remains director and controlling shareholder. Chan Weng Fui remains a substantial shareholder. The annual reports for 2022 and 2023 have not yet been released. They will show whether anything changed — or whether the same names appear at the same levels.
