Hong Kong’s TNG Fintech faces lawsuit over oppression

Minority shareholders of Malaysian fintech firm Tranglo filed an oppression suit against Hong Kong-based TNG Fintech Group, which acquired a 60% stake in Tranglo from private equity fund management company Ekuinas in October 2018.

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The suit follows a series of events that impeded Tranglo’s business operations, including TNG Fintech’s rejection of the firm’s proposed financing plan and its unreasonable delay in signing up new bank partners, according to a statement.

TNG Fintech CEO Alex Kong also admitted to the Central Bank of Malaysia that its US$115 million series A funding never materialized. The company announced the “record-breaking” investment back in 2017, which it claimed was led by Chinese private equity fund New Margin Capital.

In addition, TNG Fintech also attempted to install Kong’s sister as a required signatory of all bank accounts maintained by Tranglo, the statement said.

Along with Kong, Wong Wing Chi and Tranglo co-founder Sia Hui Yong were named as defendants in the suit. Kong and Wong sit on Tranglo’s board as TNG Fintech representatives after the acquisition, and allegedly rejected a dividend payout to shareholders despite the company’s healthy performance.

The suit was brought about by Impiro Asia and Mohammad Hassan Rasheed Gharaybeh, who collectively hold 13.6% equity in Tranglo.

“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,” said Impiro Asia director Simon Landsheer.

According to the statement, TNG Fintech, through Kong, gave assurances to Bank Negara Malaysia that it will acquire the minority stake by February 1, 2019. The suit also claims that there were six repeated requests by minority shareholders for a shareholder agreement to be signed, which were all refused by TNG Fintech, represented by Wong and Kong.

“The proposed payment structures were dependent on TNG Fintech’s initial public offering in the US, 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,” said Landsheer.

According to the statement, Kong’s previous businesses were wound up by the government of Malaysia and Technology Park Malaysia for non-payment of taxes and rental fees, respectively. The TNG Fintech exec also had a track record of bankruptcies in Malaysia and Hong Kong.