KUALA LUMPUR: Sapura Resources Bhd says its managing director Datuk Shahriman Shamsuddin has been asked to abstain from managing its aviation business.
Sapura Resources added that the board aviation management committee had been formed to undertake his role.
"The chief operating officer of aviation and all the heads in the aviation business will report to the Board Aviation Management Committee.
"The company assures all shareholders that we will comply with all provisions of the law," it said, adding that it had implemented several key measures, including obtaining legal opinions.
Sapura Resources was responding to a Business Times article today which raised minority shareholders' concerns about potential conflicts of interest involving Shahriman.
Sapura Resources had, in its Bursa Malaysia filing on July 12 last year, inked a non-binding conditional heads of agreement with RoyalJet LLC for the proposed disposal of its entire stake in Sapura Aero Sdn Bhd.
RoyalJet reportedly was planning for Asian expansion through the potential acquisition of Sapura Resources' aviation business at Sultan Abdul Aziz Shah Airport (LTSAAS) in Subang.
However on July 18 this year, Sapura Resources entered into a Memorandum of Understanding (MoU) with Subang MRO Sdn Bhd to form a business collaboration.
In December 2023, it was reported that Explorer Group Sdn Bhd and RoyalJet had signed MoU to collaborate on private flight operations based at LTSAAS.
Sources told Business Times that this would not have raised eyebrows if it was not for the fact that there was a glaring conflict of interest highlighted by minority shareholders during Sapura Resources' recent annual general meeting.
This was given that Shahriman was a shareholder and executive director of Explorer Group, and also managing director of Sapura Resources.
Sapura Resources said its board of directors was adhering to the advice given and proceeding with the necessary actions to ensure compliance with the law.
Additionally, the company said Bursa had been updated on the situation, and copies of the legal opinions had been submitted to the regulator.
"The board of directors will continue to exercise its fiduciary duties in the best interest of the company and adhere to good corporate governance standards," it noted.
Meanwhile, Sapura Resources acknowledged potential competition if Explorer Group, in partnership with RoyalJet enters the hangarage, ground handling, aircraft management, and private jet maintenance, repair and overhaul (MRO) sectors.
The company said its aviation business already covers hangarage, ground handling, and aircraft management, with plans to potentially expand into private jet MRO.
"The company is currently getting more information on this matter and is in the process of assessing the options available to address the competition and conflict situation.
"The appropriate announcements will be made in due course," it said in a filing to Bursa Malaysia today.
Sapura Resources clarified that the MoU with Subang MRO announced on July 18 this year was for a collaboration in the private jet MRO segment.
This was separate from the commercial MRO business the company exited in March 2022.
On the non-binding conditional heads of agreement with RoyalJet, the company said it had expired on June 23 this year with no offer received from the Abu Dhabi firm.