(08-02-2013, 08:02 PM)hongonn Wrote: [ -> ] (08-02-2013, 06:02 PM)KopiKat Wrote: [ -> ]Above is extracted from Post #173 of this thread. Part 1 already done some time back. Today, Part 2, they resigned.... Extracts,
RESIGNATION OF INDEPENDENT DIRECTORS / CHANGES IN THE COMPOSITIONS OF BOARD AND BOARD COMMITTEES
The Board of Directors of Nera Telecommunications Ltd (the “Company”) wishes to announce that Mr S Chandra Das, Mr Lau Ping Sum and Mr Sitoh Yih Pin have resigned as Directors of the Company with effect from 8 February 2013.
I am fine with the latest result but this news is really annoying. Now they have forced out all the directors on board except the CEO. Probably some internal conflict going on.
Does it form any serious red flag? Or it is norm for new investor to rid of the directors? All 3 resigned are independent non executive directors, will this seriously shake the business?
For me, it was a high probability outcome and I don't see it as a sign of serious internal conflicts. My bigger worry was that they may cut dividend payout...
My current thoughts are the IDs (btw, all are PAP-linked) were possibly useful when Neratel was controlled by Eltek. Perhaps their network from their political affiliation would have been useful enough to provide some initial advantages, especially for Singapore based projects. As Neratel was almost like a subsidiary, there're likely to be many constraints in biz territory and product line-ups. What they can do and cannot do was very likely dictated by Eltek, who'll likely have their own priorities and own interests first. So, ya, I think the IDs' jobs must have almost been a no-brainer kind...
Now, with the change in majority shareholder, we have in effect a Neratel who's cut off from their roots.... They got new territory rights to MENA (which is a plus) and they now get their Nera products direct from the factories (which has a new owner, Ceragon, who's also a competitor). There's also a non-competition clause for the next couple of years, IIRC.
IMO, the Neratel of today is going to be very different from that of 1-2 years back. Being cut off from Eltek, there're going to be a lot of new challenges and uncertainties to handle. Where we were previously looking at a Neratel that seems to have plateaued and stuck at a steady and rather stable level of Revenue & Earnings + Dividends, what's going to happen next will largely depend on how versatile the management is. Of course it'll not be immediate, perhaps when the non-competitive clauses expires...this year(?) or next (?).
Looking at the background of the recently resigned 3 IDs, I have doubts that they'll be as effective in the 'new' Neratel. I do not have the confidence they can rise to the new challenges ahead anyway. So, ya, good to get them replaced...
Since they didn't cut my 4cts dividend, I'm now more hopeful that the new controlling shareholder and my expectations may be more aligned... Perhaps some growth in Indonesia through their network?? An increased scope of biz beyond Telecom and Infocomm?? Let's see what'll happen... Got to stay nimble tho', in case I'm wrong in my assessment...
Note : I'm quite heavily vested, so my views are definitely tainted...I may also suddenly let go of my stake (if I find something better) and not post here... So, make your own decisions..
