redtone international berhad - Announcements - Bursa Malaysia

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. 

If you are in any doubt as to the course of action you should take, you should consult your stockbroker, bank manager, solicitor, accountant 

or other independent adviser immediately. 

Bursa Malaysia Securities Berhad has not perused this Circular and takes no responsibility, made no representation of its accuracy or 

completeness and expressly disclaims any liability for any loss however arising from your reliance upon the whole or any part of this 

Circular. 

REDTONE INTERNATIONAL BERHAD 

(Company No.: 596364-U) 

(Incorporated in Malaysia under the Companies Act, 1965) 

CIRCULAR TO SHAREHOLDERS 

IN RELATION TO THE 

PART A 

PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY 

TRANSACTIONS OF A REVENUE OR TRADING NATURE 

PART B 

PROPOSED RENEWAL OF AUTHORITY TO PURCHASE ITS OWN SHARES BY THE COMPANY 

The Ordinary Resolutions in respect of the above will be tabled as Special Businesses at the Company’s Seventh (7th) Annual General 

Meeting (“AGM”) to be held at Anggerik Room, 4th Floor, Hotel Equatorial, Jalan Sultan Ismail, 50250 Kuala Lumpur on Wednesday, 28 

October 2009 at 10:00 a.m. Notice of the AGM together with a Form of Proxy are set out in the Annual Report of the Company for the 

financial year ended 31 May 2009 dispatched together with this Circular. 

The Form of Proxy must be lodged at the Registered Office of the Company at Level 18, The Gardens North Tower, Mid Valley City, 

Lingkaran Syed Putra, 59200 Kuala Lumpur at least forty eight (48) hours before the appointed time for the meeting or any adjournment 

thereof. The lodging of the Form of Proxy will not preclude you from attending and voting in person at the meeting should you subsequently 

wish to do so. The last date and time for lodging Form of Proxy is on 26 October 2009 at 10:00 a.m. 

This Circular is dated 6 October 2009

DEFINITIONS 

Except where the context otherwise requires, the following words or abbreviations shall have the 

following meanings: 

“Act” : Companies Act, 1965, as amended from time to time and any 

enactment thereof 

“AMLR” : ACE Market Listing Requirements of Bursa Securities and any 

amendments thereto 

“AGM” : Annual General Meeting 

“Board” : Board of Directors of REDtone 

“Bursa Securities” : Bursa Malaysia Securities Berhad (635998-W) 

“CMSA” : Capital Markets & Services Act 2007 

“DC” : DE Content Sdn Bhd (784389-T), a wholly-owned subsidiary of DM 

“DM” : DE Multimedia Sdn Bhd (784388-H), a subsidiary of DMH 

‘DMH” : DE Multimedia Holding Sdn Bhd (784364-K), a subsidiary of RMMSB 

“eBT” : eB Technologies Sdn Bhd (482157-A) 

“ESOS” : Employees’ share option scheme 

“LPD” : 16 September 2009, being the latest practicable date 

“Market Day” : Any day between Monday and Friday, both days inclusive, which is not 

a public holiday and on which Bursa Securities is open for trading in 

securities 

“Memorandum” : Memorandum of Association 

“MSB” : Meridianotch Sdn Bhd (725479-A), a joint controlled entity of RT 

“Proposed Share Buy- 

Back” 

“Proposed Shareholders’ 

Mandate” 

: Proposed renewal of authority for the Company to buy-back up to 10% 

of the issued and paid-up share capital of the Company as set out in 

Part B of this Circular 

: Proposed renewal of existing shareholders’ mandate for the Company 

and/or its subsidiaries to enter into recurrent transactions with Related 

Parties as set out in Section 2.5.1 of Part A of this Circular 

“RCNX” : REDtone-CNX Broadband Sdn Bhd (593355-A), an associate of RT 

“Recurrent Related Party 

Transactions” or “RRPTs” 

: Related party transactions which are recurrent, of a revenue or trading 

nature which are necessary for REDtone Group’s day-to-day 

operations entered into in the ordinary course of business of the Group 

“REDtone” or “Company” : REDtone International Berhad (596364-U) 

“REDtone Group” or 

“Group” 

“REDtone Shares” or 

“Shares” 

: REDtone and its subsidiaries, collectively 

: Ordinary shares of RM0.10 each in REDtone 

“Related Party(ies)” : Director(s), major shareholder(s) of REDtone or person(s) connected 

with such Director(s) or major shareholder(s) including any person 

who is or was within the preceding 6 months of the date on which the 

terms of the transaction were agreed upon, a director or major 

shareholder of the Company and/or its subsidiaries or a chief 

executive of REDtone and/or its subsidiaries, who are interested in the 

Proposed Shareholders’ Mandate 

i

DEFINITIONS (CONT’D) 

“RHPL” : REDtone Telecommunications (China) Limited (972896), a subsidiary 

of RT 

“RM” : Ringgit Malaysia 

“RMSB” : REDtone Marketing Sdn Bhd (526020-T), a wholly-owned subsidiary 

of REDtone 

“RMMSB” : REDtone Multimedia Sdn Bhd (677594-A), a wholly-owned subsidiary 

of REDtone 

“RMSSB” : REDtone Mobile Services Sdn Bhd (619094-D), a wholly-owned 

subsidiary of RT 

“RMT” : REDtone Mytel Sdn Bhd (632786-M), a subsidiary of RT 

“RN” : REDtone Network Sdn Bhd (524768-X), a subsidiary of REDtone 

“RSSB” : REDtone Software Sdn Bhd (637608-U) (formerly known as CNX 

Software Sdn. Bhd.), a wholly-owned subsidiary of REDtone 

“RT” : REDtone Technology Sdn Bhd (413031-V), a wholly-owned subsidiary 

of REDtone 

“RTC” : REDtone Telecommunications Sdn Bhd (378160-H), a wholly-owned 

subsidiary of REDtone 

“RTECH” : REDtone Technology Pte Ltd (200009150D), a wholly-owned 

subsidiary of RT 

“RTSL” : REDtone Telecommunications (Shanghai) Limited (78314585-4), a 

wholly-owned subsidiary of RHPL 

“VTSPL” : VMS Telecommunications (S) Pte Ltd (200806023D), a wholly-owned 

subsidiary of RTECH 

“Warisan Jutamas” : Warisan Jutamas Sdn Bhd (773531-V), a substantial shareholder of 

REDtone 

All references to “our Company” and “REDtone” in this Circular are to REDtone International Berhad, 

and all references to “our Group” and “REDtone Group” are to our Company and our subsidiaries. All 

references to “we”, “us” and “our” are to our Company, and save where the context otherwise requires, 

shall include our subsidiaries. 

All reference to “you” in this Circular refers to the shareholders of our Company. 

Any reference to a time of day in this Circular shall be a reference to Malaysian time, unless otherwise 

stated. 

ii

CONTENTS 

PART A 

LETTER TO OUR SHAREHOLDERS IN RELATION TO THE PROPOSED SHAREHOLDERS’ 

MANDATE CONTAINING: 

SECTION PAGE 

1. INTRODUCTION 1 

2. DETAILS OF THE PROPOSED SHAREHOLDERS’ MANDATE 2 

3. RATIONALE FOR THE PROPOSED SHAREHOLDERS’ MANDATE 8 

4. EFFECTS OF THE PROPOSED SHAREHOLDERS’ MANDATE 9 

5. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS 9 

6. DIRECTORS’ RECOMMENDATION 10 

7. APPROVAL REQUIRED 10 

8. AGM 11 

9. FURTHER INFORMATION 11 

PART B 

LETTER TO OUR SHAREHOLDERS IN RELATION TO THE PROPOSED SHARE BUY-BACK 

CONTAINING: 

SECTION PAGE 

1. INTRODUCTION 12 

2. DETAILS OF THE PROPOSED SHARE BUY-BACK 13 

3. RATIONALE FOR THE PROPOSED SHARE BUY-BACK 14 

4. EFFECTS OF THE PROPOSED SHARE BUY-BACK 15 

5. DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTERESTS 20 

6. DIRECTORS’ RECOMMENDATION 20 

7. APPROVAL REQUIRED 20 

8. AGM 20 

9 FURTHER INFORMATION 20 

APPENDIX : FURTHER INFORMATION 21 

iii

PART A 

LETTER TO OUR SHAREHOLDERS IN RELATION TO THE PROPOSED 

SHAREHOLDERS’ MANDATE

Board of Directors: 



(Incorporated in Malaysia) 

1 

Registered Office: 

Level 18 

The Gardens North Tower 

Mid Valley City 

Lingkaran Syed Putra 

59200 Kuala Lumpur 

6 October 2009 

Dato’ Larry Gan Nyap Liou @ Gan Nyap Liow (Chairman/Independent Non-Executive Director) 

Mr. Wei Chuan Beng (Managing Director) 

Encik Zainal Amanshah bin Zainal Arshad (Group Chief Executive Officer) 

Mr. Lau Bik Soon (Executive Director) 

Mr. Mathew Thomas A/L Vargis Mathews (Independent Non-Executive Director) 

Encik Shaifubahrim bin Mohd Saleh (Independent Non-Executive Director) 

Dato’ Suriah Abd Rahman (Independent Non-Executive Director) 

To: Our Shareholders 

Dear Sir/Madam, 

PROPOSED SHAREHOLDERS’ MANDATE 

1. INTRODUCTION 

On 10 November 2008, the Company obtained a mandate from its shareholders for the 

Company and/or its subsidiaries to enter into RRPTs as contemplated in the Proposed 

Renewal of Shareholders’ Mandate with Related Parties in the ordinary course of business 

based on commercial terms which are not more favourable to the Related Parties than those 

generally available to the public which are necessary for REDtone Group’s day-to-day 

operations. 

The said mandate for RRPTs shall lapse at the conclusion of the forthcoming AGM unless 

authority for its renewal is obtained from the shareholders of the Company at the forthcoming 

AGM.

On 10 September 2009, the Board announced that the Company proposes to seek a renewal 

of the shareholders’ mandate to allow the REDtone Group to enter into the RRPTs, which are 

necessary for its day-to-day operations and are in the ordinary course of business and which 

the REDtone Group may enter into from time to time. 

The purpose of this Circular is to provide you with details of the Proposed Shareholders’ 

Mandate and to seek your approval on the resolution pertaining to the Proposed 

Shareholders’ Mandate to be tabled at our forthcoming AGM at Anggerik Room, 4th Floor, 

Hotel Equatorial, Jalan Sultan Ismail, 50250 Kuala Lumpur on Wednesday, 28 October 2009 

at 10:00 a.m. The Notice convening the AGM is enclosed in the Annual Report of the 

Company for the financial year ended 31 May 2009 which is dispatched together with this 

Circular. 

2. DETAILS OF THE PROPOSED SHAREHOLDERS’ MANDATE 

2.1 Introduction 

Under Rule 10.09(2) of the AMLR, a listed corporation may seek shareholders’ 

mandate for RRPTs, subject to, inter-alia, the following: 

(a) the transactions are in the ordinary course of business and are on terms not 

more favourable to the related party than those generally available to the 

public; 

(b) the shareholders’ mandate is subject to annual renewal and disclosure is 

made in the annual report of the aggregate value of transactions conducted 

pursuant to the shareholders’ mandate during the financial year where: 

(i) the consideration, value of the assets, capital outlay or costs of 

RRPT is RM1 million or more; or 

(ii) the percentage ratio of such RRPT is 1% or more, 

whichever is the lower; 

(c) the listed corporation’s circular to shareholders for the shareholders’ mandate 

includes the information as may be prescribed by Bursa Securities. The 

circular must be submitted to Bursa Securities together with a checklist 

showing compliance with such information; 

(d) in a meeting to obtain shareholders’ mandate, the interested director, 

interested major shareholder or interested person connected with a director 

or major shareholder and where it involves the interest of an interested 

person connected with a director or major shareholder, such director or major 

shareholder, must not vote on the resolution to approve the transactions. An 

interested director or interested major shareholder must ensure that persons 

connected with him abstain from voting on the resolution approving the 

transactions; and 

(e) the listed corporation immediately announces to Bursa Securities when the 

actual value of a RRPT entered into by the listed corporation, exceeds the 

estimated value of the RRPT disclosed in the circular by 10% or more and 

must include the information as may be prescribed by Bursa Securities in its 

announcement. 

The Proposed Shareholders’ Mandate, if approved by the shareholders of the 

Company at the forthcoming AGM, shall continue to be in force until: 

(i) the conclusion of the next AGM of the Company following the general 

meeting at which such mandate was passed, at which time it will lapse, 

unless by a resolution passed at the meeting, the authority is renewed; 

2

(ii) the expiration of the period within which the next AGM after the date it is 

required to be held pursuant to Section 143(1) of the Act, (but will not extend 

to such extension as may be allowed pursuant to Section 143(2) of Act); or 

(iii) revoked or varied by resolution passed by the shareholders in general 

meeting, 

whichever is the earlier. 

2.2 Definitions 

(A) Director 

“Director” shall have the meaning given in Section 2(1) of the CMSA and 

includes any person who is or was within the preceding 6 months of the date 

on which the terms of the transaction were agreed upon, a director of the 

listed corporation, its subsidiary or holding company or a chief executive of 

the listed corporation, its subsidiary or holding company. 

(B) Related Party Transaction 

“Related party transaction” is defined in Rule 10.02 of the AMLR as a 

transaction entered into by the listed corporation or its subsidiaries which 

involves the interest, direct or indirect, of a related party. 

(C) Major Shareholder 

(D) RRPT 

“Major Shareholder” includes any person who is or was within the preceding 

6 months of the date on which the terms of the transaction were agreed 

upon, has an interest or interests in one or more voting shares in a 

corporation and the nominal amount of that share, or the aggregate of the 

nominal amounts of those shares, is: 

(i) 10% or more of the aggregate of the nominal amounts of all the 

voting shares in the corporation; or 

(ii) 5% or more of the aggregate of the nominal amounts of all the voting 

shares in the corporation where such person is the largest 

shareholder of the corporation. 

“Recurrent related party transaction” as stated in Para 3.1.1 of Guidance 

Note 8 of the AMLR, considers the frequency or regularity of the transaction. 

A transaction which has been made or will be made by the listed corporation 

at least once in three (3) years in the course of its business will be 

considered recurrent. 

“Revenue nature necessary for day-to-day operations” as stated in Para 3.1.2 

of Guidance Note 8 of the AMLR, refers to day-to-day operations which must 

either contribute directly or indirectly to the generation of revenue for the 

listed corporation. 

“In the ordinary course of business” as stated in Para 3.1.3 of Guidance Note 

8 of the AMLR, refers to transactions which would reasonably be expected to 

be carried out by the listed corporation given the type of business the listed 

corporation is involved in. 

3

2.3 Principal activities of the Company, subsidiaries, jointly controlled entity and 

its associates companies 

The principal activities of REDtone are investment holding and provision of 

management services. 

The principal activities of its subsidiaries, jointly controlled entity and associates 

companies are as follows: 

Name Principal Activities 

Subsidiaries of REDtone 

RMMSB Investment holding 

RMSB Research and development, manufacturing and 

marketing of telecommunication and multimedia 

solutions 

RN Research and development and marketing of 

communication application such as payphone 

RSSB Research and development on all types of technology 

based products. 

RT Provider of total solutions in business communication 

and telecommunication services provisioning and 

investment holding. 

RTC 

Subsidiaries of RT 

RHPL Telecommunication business and investment holding 75% 

RMSSB Research, design, development and marketing of the 

VOIP customer premise equipment 

RMT Marketing of telecommunication and multimedia 

solutions 

RTECH Provider of telecommunication services 

Subsidiary of RMMSB 

4 

100% 

60% 

100% 

DMH Investment holding 61.1% 

Subsidiary of DMH 

Research, development, manufacturing and marketing 

of computer-telephony integration products, provisioning 

of telecommunication services and investment holding 

Effective 

equity 

interest 

100% 

100% 

70% 

100% 

100% 

100% 

DM Provider of contents for digital television services 54.99%

Subsidiary of DM 

DC Provider of contents for digital television services 54.99% 

Subsidiary of RHPL 

RTSL Provider of telecommunication services 100% 

Subsidiary of RTECH 

VTSPL Provider of telecommunication services 100% 

Associate of REDtone 

RCNX 

Investment in Jointly Controlled Entity 

MSB 

Provider of information technology services 

Investment holding 

5 

54.5% 

2.4 Class of related party with whom transactions have been or will be carried out 

and contemplated 

The Company and/or its subsidiaries propose to continue entering into RRPTs with its 

Related Parties (as set out in Section 2.5 of Part A of this Circular) which involve the 

Related Parties’ direct or indirect interest. 

[The rest of this page is intentionally left blank.] 

50%

2.5 Nature of RRPTs, classes of related parties and estimated value 

The nature of RRPTs which have been or will be entered into and contemplated under the Proposed Shareholders’ Mandate, the methods 

on which the transaction prices are determined, and the classes of related parties involved are as follows:- 

2.5.1 Proposed Shareholders’ Mandate for RRPTs 

No. 

Company 

Transacting 

party 

Nature of transaction 

(1) RMSB RMT RMSB sells call bandwidth 

to RMT. 

(2) RMSB 

and/or 

RCNX 

(3) RMSB 

and/or 

RCNX 

(4) RMSB 

and/or 

RCNX 

(5) RMSB 

and/or 

RCNX 

eBT Provision of outsourced 

services including call 

center, technical support 

services, consultancy and 

administrative services to 

eBT 

eBT Provision of broadband 

infrastructure and related 

services to eBT. 

eBT Annual rental for the usage 

of broadband equipment to 

eBT 

eBT Sale of internet transit 

bandwidth to eBT 

6 

Nature of 

relationship 

Methods on 

which 

transaction 

prices are 

determined 

Note (a) Prevailing 

market rates 

Note (b) Prevailing 

market rates 


market rates 


market rates 


market rates 

Estimated 

aggregate 

value per last 

Mandate 

(RM,000) 

7,630 4,589 

Actual Value 

Transacted 

as at LPD 

(RM’000) 

Estimated 

aggregate value 

from 29 October 

2009 to the date 

of the next AGM 

(RM’000) 

5,344 

400 202 200 

500 197 800 

400 71 7 

300 121 79 

The estimated values of the RRPTs as set out in table above are for the period from the conclusion of the forthcoming AGM of 

the Company until the conclusion of the next AGM of the Company based on the REDtone Group's budgeted figures for the 

respective period and may be subject to changes. The aggregate or actual values of these transactions may/may not exceed the 

estimated amounts over the said period.

Notes: 

(a) (i) RMT is a 60% owned subsidiary of RT. Lai Kim Choy is a director and major 

shareholder of RMT, by virtue of his holding of 40% equity interest in RMT. 

(ii) Zainal Amanshah bin Zainal Arshad is a director of RMSB and RMT. 

(iii) REDtone, the holding company of RMSB is deemed interested in RMT 

through its wholly owned subsidiary, RT. 

(b) (i) REDtone and eB Capital Berhad (the holding company of eBT) have 

common direct and indirect major shareholders namely Juara Sejati Sdn 

Bhd, Berjaya Capital Berhad, Bizurai Bijak (M) Sdn Bhd, Berjaya Group 

Berhad, Berjaya Corporation Berhad, Hotel Resort Enterprise Sdn Bhd and 

Tan Sri Dato’ Seri Vincent Tan Chee Yioun. 

(ii) Zainal Amanshah bin Zainal Arshad is a Director of RMSB, RCNX, REDtone 

and eB Capital Berhad. He has resigned as Director of eB Capital Berhad 

with effect from 15 April 2009. 

2.6 Deviation from Mandate 

The actual value of RRPTs did not exceed the estimated value as approved under 

the previous shareholders’ mandate granted to the Company at the last AGM 

2.7 Review procedures for the Recurrent Related Party Transactions 

The Group has established review procedures to ensure that the RRPTs are 

undertaken on arm’s length basis and on the Group’s normal commercial terms, 

consistent with the Group’s usual business practices and policies, which are not more 

favourable to the Related Parties than those generally available to the public and are 

not detrimental to minority shareholders. 

The procedures are as follows: 

(a) A list of RRPTs has been circulated to the Directors and management of the 

Group to notify that all RRPTs are required to undertaken on an arm’s length 

basis and on normal commercial terms which are not more favourable to the 

Related Parties than those generally available to the public and are not 

detrimental to the minority shareholders as well to the REDtone Group. 

(b) All RRPTs will be reviewed by the Audit Committee of the Company to 

ensure that the RRPTs were carried out on normal commercial terms that are 

not detrimental to the interest of the minority shareholders as well as to the 

REDtone Group. Any member of the Audit Committee may as he deems fit, 

request for additional information pertaining to RRPTs from independent 

sources or advisers. 

As REDtone’s products & services are proprietory in nature, prices are 

negotiated specifically between the proprietor and purchasers. Where 

feasible, quotation will be obtained from at least two non-related third parties 

for comparison to determine whether the price and terms offered to/by the 

related parties are fair and reasonable and comparable to those offered to/by 

other unrelated third parties for the same or substantially similar type of 

produces/services and/or quantities. Where it is impractical or impossible for 

quotes and/or tenders to be obtained from unrelated parties, or where there 

has not been any similar or substantially similar transactions between 

REDtone and Related Parties, the terms of the transactions for the products 

or services will be in accordance with applicable industry norms, prevailing 

commercial rates and at rates not more favourable to the Related Parties 

than those generally available to the public. 

(c) Records of all RRPTs will be retained and compiled for review by the Audit 

Committee and noted by the Board on a yearly basis. 

(d) Disclosure on all RRPTs will be made in the Annual Report of the Company. 

7

(e) If a member of the Board or Audit Committee has an interest, direct or 

indirect, in a RRPT to be reviewed by the Board or Audit Committee as the 

case may be, he will abstain from all deliberations and decision-making by 

the Board or Audit Committee in respect of such RRPT. 

(f) The Audit Committee reviews RRPTs once in a financial year, to ensure that 

relevant internal review procedures are adhered to and carried out on normal 

commercial terms that are not detrimental to the interest of the minority 

shareholders. 

2.7.1 Threshold of Authority 

The Group has in place a level of authority policy to facilitate the orderly and efficient 

operations of the Group. Managers are given a reasonable and acceptable level of 

authority to approve limited purchases and payments. For amounts exceeding the 

managers’ authority i.e. RM8,000, prior approval of the Executive Directors is 

required. 

2.8 Statement by Audit Committee 

The Audit Committee of the Company has seen and reviewed the procedures 

mentioned in Section 2.7 above and is of the view that the said procedures are 

sufficient to ensure that the RRPTs entered into are monitored, tracked and identified 

in a timely manner and are not more favorable to the Related Parties than those 

generally available to the public and are not detrimental to the minority shareholders. 

The processes and procedures in connection thereto are reviewed annually. 

2.9 Disclosure of RRPTs 

In accordance with Rule 10.09 of the AMLR, disclosure shall be made in the Annual 

Report of the Company of a breakdown of the aggregate value of all transactions 

conducted during the financial year, names of Related Parties involved in each type 

of RRPT and their relationship with the REDtone Group pursuant to the shareholders’ 

mandate. 

3. RATIONALE FOR THE PROPOSED SHAREHOLDERS’ MANDATE 

The RRPTs entered or to be entered into by the Group are in the ordinary course of business 

and are of a revenue or trading nature which are likely to occur with some degree of 

frequency and arise at any time and from time to time. 

These transactions may be time-sensitive and confidential in nature, which made it 

impractical to seek shareholders’ approval on a case-by-case basis before entering into such 

transactions. As such, the Board is seeking the shareholders’ mandate pursuant to Rule 

10.09 and Guidance Note 8 of the AMLR to allow the Group to enter into such RRPTs on 

terms that are not more favourable to the Related Parties than those generally available to the 

public and not to the detriment of minority shareholders of the Company. 

The REDtone Group and the Related Parties have close co-operation and good 

understanding of each other’s business need, thus providing a platform where all parties can 

benefit from conducting the RRPTs. In addition, REDtone Group would have an advantage of 

familiarity with the background, financial well-being and management of the Related Party, 

thus enabling more informed commercial decisions to be made and minimising any risk of 

interruptions to the Group’s day-to-day operations. Given the complementary nature of the 

Related Parties’ activities, as well as the fact that the activities are in the ordinary course of 

business and are of a revenue or trading nature, it is anticipated that the RRPTs would occur 

on a frequent and recurrent basis. In addition, the REDtone Group will also leverage on the 

Related Party’s resources. 

By procuring the Proposed Shareholders’ Mandate and renewing the same on an annual 

basis, this would eliminate the necessity to convene separate general meetings from time to 

time. This would reduce substantially administrative time, inconvenience and expenses 

8

associated with convening such meetings, without compromising the corporate objectives of 

the Group or adversely affecting the business opportunities available to the Group. 

4. EFFECTS OF THE PROPOSED SHAREHOLDERS’ MANDATE 

The Proposed Shareholders’ Mandate will not have any effect on the issued and paid-up 

share capital and substantial shareholding structure of REDtone and are not expected to have 

any material effect on the net assets and earnings per share of REDtone Group. 

5. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS 

Save as disclosed below, none of the Directors and major shareholders and/or persons 

connected to them have any direct and/or indirect interest in the Proposed Shareholders’ 

Mandate. 

The direct and indirect shareholdings of the interested Directors, major shareholders and 

persons connected to them in the issued and paid up share capital of REDtone as at the LPD 

are as follows: 

Interested Director/Major shareholders 

Zainal Amanshah bin Zainal Arshad 2,201,768 0.57 94,227,291 (1) 24.25 

Juara Sejati Sdn Bhd 

Berjaya Capital Berhad 

Bizurai Bijak (M) Sdn Bhd 

Berjaya Group Berhad 

Berjaya Corporation Berhad 

Hotel Resort Enterprise Sdn Bhd 

Tan Sri Dato’ Seri Vincent Tan Chee 

Yioun 

Interested Director of REDtone’s Subsidiary 

Person Connected to the Interested Director 

Direct Indirect 

No. of Shares % No. of Shares % 

9 

3,825,000 0.98 41,425,800 (2) 10.66 

- - 22,225,800 (3) 5.72 

- - 22,225,800 (4) 5.72 

- - 45,250,800 (5) 11.64 

- - 45,250,800 (6) 11.64 

- - 45,250,800 (7) 11.64 

- - 45,250,800 (7) 11.64 

Lai Kim Choy - - - - 

Suryani binti Ahmad Sarji 625,000 0.16 - - 

Indah Pusaka Sdn. Bhd. 93,602,291 24.09 - -

Notes: 

1 Deemed interested by virtue of the direct shareholding of his wife, Suryani binti Ahmad 

Sarji and his interest in Indah Pusaka Sdn. Bhd. 

2. Deemed interested by virtue of its (i) deemed interest in Berjaya Capital Berhad, the holding 

company of Berjaya Sompo Insurance Berhad and Prime Credit Leasing Sdn Bhd; and (ii) 

interest in Berjaya Land Berhad, the holding company of Selat Makmur Sdn Bhd. 

3. Deemed interested by virtue of its interest in Berjaya Sompo Insurance Berhad and Prime 

Credit Leasing Sdn Bhd. 

4. Deemed interested by virtue of its interest in Berjaya Capital Berhad, the holding company of 

Berjaya Sompo Insurance Berhad and Prime Credit Leasing Sdn Bhd. 

5. Deemed interested by virtue of its interest in Juara Sejati Sdn Bhd, Berjaya Sompo Insurance 

Berhad, Prime Credit Leasing Sdn. Bhd. and Selat Makmur Sdn. Bhd.. 

6. Deemed interested by virtue of its interest in Berjaya Group Berhad. 

7. Deemed interested by virtue of their interests in Berjaya Corporation Berhad. 

The interested Director namely Zainal Amanshah bin Zainal Arshad has abstained and will 

continue to abstain from all Board deliberations and voting at the meeting in respect of the 

transactions in which he has an interest as detailed in Section 2.5 of Part A of this Circular. 

The interested Director namely Zainal Amanshah bin Zainal Arshad and interested major 

shareholders (namely Juara Sejati Sdn Bhd, Berjaya Capital Berhad, Berjaya Corporation 

Berhad, Bizurai Bijak (M) Sdn Bhd, Berjaya Group Berhad, Hotel Resort Enterprise Sdn Bhd 

and Tan Sri Dato’ Seri Vincent Tan Chee Yioun) will also abstain from voting in respect of 

their direct and/or indirect shareholdings on the resolution approving the Proposed 

Shareholders’ Mandate at the forthcoming AGM to be convened. 

The interested Director and major shareholders namely Zainal Amanshah bin Zainal Arshad, 

Juara Sejati Sdn Bhd, Berjaya Capital Berhad, Bizurai Bijak (M) Sdn Bhd, Berjaya Group 

Berhad, Berjaya Corporation Berhad, Hotel Resort Enterprise Sdn Bhd and Tan Sri Dato’ Seri 

Vincent Tan Chee Yioun have also undertaken to ensure that the persons connected to them 

(if any) will abstain from voting via their direct and/or indirect shareholdings on the resolution 

pertaining to the Proposed Shareholders’ Mandate at the forthcoming AGM. 

6. DIRECTORS’ RECOMMENDATION 

The Board (save and except for Director namely Zainal Amanshah bin Zainal Arshad who is 

interested in the Proposed Shareholders’ Mandate), having considered all aspects of the 

Proposed Shareholders’ Mandate, is of the opinion that the Proposed Shareholders’ Mandate 

is in the best interest of the REDtone Group. Accordingly they (save and except for Director 

namely Zainal Amanshah bin Zainal Arshad) recommend that you vote in favour of the 

resolution pertaining to the Proposed Shareholders’ Mandate under special business in the 

agenda as set out in the Annual Report of REDtone for the financial year ended 31 May 2009 

to be tabled at the forthcoming AGM. 

7. APPROVAL REQUIRED 

The Proposed Shareholders’ Mandate is subject to the approval of the shareholders at the 

forthcoming AGM. 

10

8. AGM 

We will hold our AGM at Anggerik Room, 4 th Floor, Hotel Equatorial, Jalan Sultan Ismail, 

50250 Kuala Lumpur on Wednesday, 28 October 2009 at 10:00 a.m. for the purpose of 

considering and, if thought fit, passing the resolution to give effect to the Proposed 

Shareholders’ Mandate. The Notice of the AGM is enclosed in the Annual Report for the 

financial year ended 31 May 2009 which is dispatched together with this Circular 

If you are unable to attend and vote in person at our forthcoming AGM, please complete, sign 

and return the Form of Proxy enclosed in the Annual Report for the financial year ended 31 

May 2009 dispatched together with this Circular in accordance with the instructions therein, 

as soon as possible and, in any event, so as to arrive at our Registered Office at Level 18, 

The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur not 

less than forty eight (48) hours before the time and date fixed for our forthcoming AGM or any 

adjournment thereof. If you have lodged the Form of Proxy, you may still attend and vote at 

our forthcoming AGM if you subsequently wish to do so. 

9. FURTHER INFORMATION 

Shareholders are advised to refer to the Appendix of this Circular for further information. 

Yours faithfully. 

for and on behalf of the Board of 


WEI CHUAN BENG 

Managing Director 


11

PART B 

LETTER TO OUR SHAREHOLDERS IN RELATION TO THE PROPOSED SHARE BUY- 

BACK

Board of Directors: 



(Incorporated in Malaysia) 

12 

Registered Office 

Level 18 

The Gardens North Tower 

Mid Valley City 

Lingkaran Syed Putra 

59200 Kuala Lumpur 

6 October 2009 

Dato’ Larry Gan Nyap Liou @ Gan Nyap Liow (Chairman/Independent Non-Executive Director) 

Mr. Wei Chuan Beng (Managing Director) 

Encik Zainal Amanshah Bin Zainal Arshad (Group Chief Executive Officer) 

Mr. Lau Bik Soon (Executive Director) 

Mr. Mathew Thomas A/L Vargis Mathews (Independent Non-Executive Director) 

Encik Shaifubahrim Bin Mohd Saleh (Independent Non-Executive Director) 

Dato’ Suriah Abd Rahman (Independent Non-Executive Director) 

To: Our Shareholders 

PROPOSED SHARE BUY-BACK 

1. INTRODUCTION 

On 10 November 2008, the Company obtained a mandate from its shareholders for the 

Company to purchase shares of up to 10% of the issued and paid-up share capital of REDtone 

from the market. The said mandate shall lapse at the conclusion of the forthcoming AGM unless 

authority for its renewal is obtained from the shareholders of the Company at the forthcoming 

AGM. 

On 10 September 2009, the Company announced that it proposes to seek the approval of its 

shareholders for the Proposed Share Buy-Back. The purpose of this Circular is to provide you 

with details of the Proposed Share Buy-Back, to set out the views of your Board and to seek 

your approval for the resolution pertaining to the Proposed Share Buy-Back to be tabled at the 

forthcoming AGM at Anggerik Room, 4th Floor, Hotel Equatorial, Jalan Sultan Ismail, 50250 

Kuala Lumpur on Wednesday, 28 October 2009 at 10:00 a.m. The Notice convening the AGM is 

enclosed in the Annual Report for the financial year ended 31 May 2009 which is dispatched 

together with this Circular.

2. DETAILS OF THE PROPOSED SHARE BUY-BACK 

The Board of REDtone proposes to seek a renewal of authority from the shareholders for the 

Company to purchase, through its stockbroker, Aseambankers Malaysia Berhad and Alliance 

Investment Bank Berhad, on Bursa Securities and/or hold up to ten percent (10%) of the issued and 

paid-up share capital of REDtone. 

The authority from the shareholders, if renewed, shall be effective immediately upon the passing of 

the ordinary resolution for the Proposed Share Buy-Back at the forthcoming AGM, up to the 

conclusion of the next AGM of REDtone unless the authority is further renewed by ordinary resolution 

passed at the said AGM (either unconditionally or subject to conditions) or upon the expiration of the 

period within which the next AGM is required by law to be held, or if revoked or varied by an ordinary 

resolution passed by the shareholders of the Company in general meeting, whichever occurs first. 

The maximum amount of funds to be allocated for the Proposed Share Buy-Back shall not exceed 

the retained profits and/or share premium account of the Company. As at 31 May 2009, the 

Company’s latest audited accumulated losses and share premium account were RM2.4 million and 

RM6.4 million respectively. The Proposed Share Buy-Back, if implemented, will be funded by 

internally generated funds and/or bank borrowings, the proportion of which depends on the quantum 

of purchase consideration and availability of internal funds of REDtone. In the event bank borrowings 

are required for the purchased of REDtone Shares, the Board will ensure that the Company has the 

capability to repay the bank borrowings and the repayment will not have a material effect on the 

Company’s cashflow. 

In accordance with the AMLR, REDtone may only purchase REDtone Shares at a price, which is not 

more than fifteen percent (15%) above the weighted average market price for the five (5) market days 

immediately prior to the date(s) of the purchase(s). 

The actual number of REDtone Shares to be purchased, the total amount of funds involved for each 

purchase, and the timing of the purchase(s) will depend on the market conditions and sentiments of 

the stock market, as well as the availability of financial resources of the Company and the availability 

of the retained profits reserve and the share premium reserve of the Company. 

Section 67A of the Act allows the purchased REDtone Shares to be cancelled, retained as treasury 

shares or a combination of both. The purchased REDtone Shares held as treasury shares may be 

either distributed as share dividends, subsequently cancelled or resold on the Bursa Securities or a 

combination of the three (3). If the treasury shares are distributed as share dividends and subject to 

the applicable prevailing laws, the costs of the REDtone Shares on the original purchase shall be 

applied in the reduction of either the share premium account or the funds otherwise available for 

distribution as dividends or both. 

REDtone may only resell treasury shares on the Bursa Securities at: 

(a) a price which is not less than the weighted average market price for the REDtone Shares for 

the five (5) market days immediately prior to the date of resale; or 

(b) a discounted price of not more than five percent (5%) to the weighted average market price of 

REDtone Shares for the five (5) market days immediately prior to the resale provided that: 

(i) the resale takes place no earlier than thirty (30) days from the date of purchase; and 

(ii) the resale price is not less than the cost of purchase of REDtone Shares being resold. 

The decision on the treatment of purchased REDtone Shares shall be made by your Board at the 

appropriate time. 

An immediate announcement will be made to Bursa Securities upon the purchase of shares, resale or 

cancellation of its treasury shares. 

13

2.1 Public Shareholdings Spread 

On the LPD, the public shareholding spread was 48.23% held by 4,747 public shareholders. 

The public shareholdings spread after the Proposed Share Buy-Back is expected to be 

reduced to 42.48% assuming that the Proposed Share Buy-Back is implemented in full. 

The Board is mindful of the requirement that any purchase of the REDtone Shares by the 

Company must not result in the public shareholding spread of REDtone failing below twentyfive 

percent (25%) of its issued and paid up share capital. 

2.2 Implications of the Malaysian Code on Take-overs and Merger 1998 

As at the LPD and based on the Company’s Register of Substantial Shareholders, the 

provisions on mandatory takeovers under the Malaysian Code on Take-over and Mergers 

1998 will not be triggered by any shareholder of REDtone solely by reason of the Proposed 

Share Buy-Back being carried out in full. 

2.3 Potential Advantages and Disadvantages of the Proposed Share Buy-Back 

The Proposed Share Buy-Back will provide our Company with the opportunity to take preemptive 

measures if need be, to stabilise the supply and demand of REDtone Shares in the 

open market, thereby allowing the price of REDtone Shares to better reflect its fundamental 

value. The maintenance of the share price is important in order to maintain investors’ 

confidence to facilitate REDtone’s future fund raising exercise via issues of equity shares, 

should there be any such exercises in future. In addition, the Proposed Share Buy-Back will 

also provide an opportunity for the Company to make a gain when it resells the purchased 

REDtone Shares for cash when market conditions improve. 

The Proposed Share Buy-Back, if implemented, would reduce the financial resources of the 

Group, which may result in the Company having to forgo other feasible investment 

opportunities that may emerge in the future or, at the least, deprive the Company and the 

Group of the interest income that can be derived from the funds utilised for the Proposed 

Share Buy-Back. The Proposed Share Buy-Back would also reduce the amount of resources 

available for distribution in the form of dividends to the shareholders of REDtone. 

However, the Board will only exercise the purchase of REDtone Shares after in-depth 

consideration of the Company’s financial resources and also the resultant impact on its 

shareholders. The Board will be mindful of the interests of the Company, the Group and the 

shareholders in implementing the Proposed Share Buy-Back. 

2.4 Purchase and resale made in the preceding 12 months 

The Company has not made any purchase or resale or cancellation of our own shares in the 

preceding 12 months, and do not currently hold any treasury shares. 

3. RATIONALE FOR THE PROPOSED SHARE BUY-BACK 

The Proposed Share Buy-Back is likely to potentially benefit the Company and its shareholders in the 

following manner: 

(i) the Company may be able to stabilise the supply and demand of the REDtone Shares in the 

open market and thereby support its fundamental value; 

(ii) if the REDtone Shares bought back by the Company are cancelled, shareholders may enjoy an 

increase in the value of their investment in the Company due to the increase in earnings per 

share as a result of the reduction in the issued and paid-up share capital of the Company as 

described in Section 4.1 below; and 

14

(iii) the Board would have an opportunity to distribute any REDtone Shares held as treasury shares 

as share dividends to reward the shareholders of the Company and/or resell the treasury 

shares at a higher price, thereby making an exceptional gain for the Company. 

4. EFFECTS OF THE PROPOSED SHARE BUY-BACK 

The financial effects of the Proposed Share Buy-Back on the share capital, net assets, working 

capital, earnings, dividend and shareholding are as follows: 

4.1 Share Capital 

On the assumption that the Proposed Share Buy-Back is carried out in full and all the 

REDtone Shares so acquired are subsequently cancelled, the Proposed Share Buy-Back will 

result in the issued and paid-up share capital of the Company as at the LPD to be reduced 

as follows: 

Existing issued 

and paid-up share 

capital 

Assuming full 

exercise of the 

remaining options 

available under the 

ESOS 

Maximum number 

of REDtone 

Shares that may 

be purchased and 

cancelled 

pursuant to the 

Proposed Share 

Buy-Back 

Resultant issued 

and paid-up share 

capital after 

cancellation of 

REDtone Shares 

purchased under 

the Proposed 

Share buy-Back 

Notes: 

*Minimum Scenario **Maximum Scenario 

No. of 

REDtone 

Shares 

‘000 

388,603 

- 

388,603 

(38,860) 

349,743 

15 

Total 

RM 000 

38,860 

- 

38,860 

(3,886) 

34,974 

No. of 

REDtone 

Shares 

‘000 

388,603 

27,197 

415,800 

(41,580) 

374,220 

Total 

RM 000 

38,860 

2,720 

41,580 

(4,158) 

37,422 

* Minimum scenario assumes that there is no further exercise of the options available under the 

ESOS prior to the implementation of the Proposed Share Buy-Back. 

** Maximum scenario assumes that all the remaining options granted and to be granted under 

the ESOS which was exercisable into 27,197,000 new REDtone Shares are fully exercised 

prior to the implementation of the Proposed Share Buy-Back.

However, in the event that all the REDtone Shares so purchased are retained as treasury 

shares, the Proposed Share Buy-Back will not have any effect on the issued and paid-up 

share capital of the Company. 

4.2 Net Assets 

The effects of the Proposed Share Buy-Back on the net assets per share of the Company 

are dependent on the purchase prices of the REDtone Shares as follows: 

(i) If all the purchased REDtone Shares are cancelled and the purchase price of the 

REDtone Shares exceeds the net assets per share of the Group, the net assets per 

share of the Group will be reduced. 

(ii) Conversely, if all the purchased REDtone Shares are cancelled and the purchase 

price of the REDtone Shares is below the net assets per share of the Group, the net 

assets per share of the Group will be increased. 

(iii) If the purchase REDtone Shares are treated as treasury shares and subsequently 

resold on the Bursa Securities, the net assets of the Group will increase if the 

Company realises a gain from the resale, and vice-versa. If the treasury shares are 

distributed as share dividends, the net assets of the Group will decrease by the cost 

of the treasury shares. 

4.3 Working Capital 

The Proposed Share Buy-Back is likely to reduce the working capital and cash flow of the 

REDtone Group, the quantum of which depends on, amongst others, the purchase price of 

REDtone Shares, the number of REDtone Shares purchased and the effective funding cost, 

if any. 

However, if the purchased REDtone Shares are treated as treasury shares and subsequently 

resold on the Bursa Securities, the working capital and cash flow of the REDtone Group will 

increase should the Company realise a gain from the resale. Again, the quantum of the 

increase in the working capital and cash flow will depend on the actual selling price of the 

treasury shares and the number of treasury shares resold. 

4.4 Earnings 

The effect of the Proposed Share Buy-Back on the earning per share (“EPS”) is dependent 

on the number of REDtone Shares purchased and the purchase price of the REDtone 

Shares, wherein the amount spent would represent the opportunity loss to generate interest 

savings and/or alternate investment income to the Company. The decrease in share capital 

arising from the Proposed Share Buy-Back will generally increase, all else being equal, the 

Group’s EPS. 

In the event that the REDtone Shares purchased are treated as treasury Shares, the extent 

of the effect on the EPS of REDtone will depend on the number and price(s) of treasury 

shares resold. 

4.5 Dividend 

Assuming the Proposed Share Buy-Back is implemented in full and the Company’s quantum 

of dividends is maintained at historical levels, the Proposed Share Buy-Back will have the 

effect of increasing the dividend rate of the Company as a result of the reduction in the 

issued and paid-up share capital of the Company. 

The Proposed Share Buy-Back may have an impact on the Company’s dividend to be 

declared for the financial year ending 31 May 2010 as it would reduce the cash available, 

which may otherwise be used for dividend payment. Nevertheless, the treasury shares 

purchased may be distributed as dividends to shareholders of the Company, if the Company 

so decides. 

16

4.6 Shareholdings 

The effect of the Proposed Share Buy-Back on the shareholding of the Directors and substantial shareholders of REDtone based on the 

Registers of Directors and substantial shareholders as at the LPD assuming that the Proposed Share Buy-Back is carried out in full and the 

REDtone Shares purchased are not from the following Directors and substantial shareholders, are as follows: 

(i) Directors 

Before the Proposed Share Buy-Back After the Proposed Share Buy-Back 


Direct Indirect Direct Indirect Direct Indirect 

Name of 

No. of 

No. of 

No. of 

No. of 

No. of 

No. of 

Directors 

Shares % Shares % Shares % Shares % Shares % Shares % 

Dato’ Larry Gan 

Nyap Liou 

- - - - - - - - 3,450,000 0.92 - - 

Wei Chuan Beng 14,960,400 3.85 10,298,976 (1) 2.65 14,960,400 4.28 10,298,976 (1) 2.94 16,210,400 4.33 10,298,976 (1) 2.75 

Zainal 

Amahshah bin 

Zainal Arshad 

2,201,768 0.57 94,227,291 (2) 24.25 2,201,768 0.63 94,227,291 (2) 26.94 6,951,768 1.86 94,227,291 (2) 25.18 

Lau Bik Soon 225,100 0.06 - - 225,100 0.06 - - 4,942,600 1.32 - - 

Mathew Thomas 

A/L Vargis 

Mathews 

- - - - - - - - 225,000 0.06 - - 

Shaifubahrim bin 

Mohd Saleh 

- - - - - - - - 135,000 0.04 - - 

Dato’ Suriah binti 

Abd Rahman 

- - - - - - - - - - - - 

Person connected to the Directors/ Substantial Shareholders 

Choo Yeh Fung 10,298,976 2.65 - - 10,298,976 2.94 - - 10,298,976 2.75 - - 

Suryani binti 

Ahmad Sarji 

625,000 0.16 - - 625,000 0.18 - - 625,000 0.17 - - 

17

Notes: 

* Minimum scenario assumes that there is no further exercise of the options available under the ESOS after the LPD. 

** Maximum scenario assumes that all the options under the ESOS are fully exercised prior to the implementation of the Proposed Share Buy-Back. 

1. Deemed interested by virtue of the direct shareholding of his wife, Choo Yeh Fung. 

2. Deemed interested by virtue of the direct shareholding of his wife, Suryani Binti Ahmad Sarji and by virtue of his interest in Indah Pusaka Sdn. Bhd. 

(ii) Substantial Shareholders 

Before the Proposed Share Buy-Back After the Proposed Share Buy-Back 


Direct Indirect Direct Indirect Direct Indirect 

Name of substantial No. of 

No. of 

No. of 

No. of 

No. of 

No. of 

shareholders 

Shares % Shares % Shares % Shares % Shares % Shares % 

Indah Pusaka Sdn Bhd 93,602,291 24.09 93,602,291 26.78 93,602,291 25.01 

Warisan Jutamas 37,800,000 9.73 - - 37,800,000 10.81 - - 37,800,000 10.10 - - 

Zainal Amanshah bin 

Zainal Arshad 

2,201,768 0.57 93,602,291 (1) 24.09 2,201,768 0.63 93,602,291 (1) 26.76 6,951,768 1.86 93,602,291 (1) 25.01 

Mohamed 

Kadir 

Shah bin - - 37,800,000 (2) 9.73 - - 37,800,000 (2) 10.81 - - 37,800,000 (2) 10.10 

Abdul Karim bin Abdul 

Kadir 

- - 37,800,000 (2) 9.73 - - 37,800,000 (2) 10.81 - - 37,800,000 (2) 10.10 

Juara Sejati Sdn Bhd 3,825,000 0.98 41,425,800 (3) 10.66 3,825,000 1.09 41,425,800 (3) 11.84 3,825,000 1.02 41,425,800 (3) 11.07 

Berjaya Capital Berhad - - 22,225,800 (4) 5.72 - - 22,225,800 (4) 6.35 - - 22,225,800 (4) 5.94 

Bizurai Bijak (M) Sdn 

Bhd 

- - 22,225,800 (5) 5.72 - - 22,225,800 (7) 6.35 - - 22,225,800 (5) 5.94 

Berjaya Group Berhad - - 45,250,800 (6) 11.64 - - 45,250,800 (6) 12.94 - - 45,250,800 (8) 12.09 

Berjaya 

Berhad 

Corporation - - 45,250,800 (7) 11.64 - - 45,250,800 (7) 12.94 - - 45,250,800 (7) 12.09 

Hotel Resort Enterprise 

Sdn Bhd 

- - 45,250,800 (8) 11.64 - - 45,250,800 (8) 12.94 - - 45,250,800 (8) 12.09 

Tan Sri Dato’ Seri - - 45,250,800 

Vincent 

Yioun 

Tan Chee 

(8) 11.64 - - 45,250,800 (8) 12.94 - - 45,250,800 (8) 12.09 

Notes: 

* Minimum scenario assumes that there is no further exercise of the options available under the ESOS after the LPD. 

** Maximum scenario assumes that all the options under the ESOS are fully exercised prior to the implementation of the Proposed Share Buy-Back. 

1. Deemed interested by virtue of his interest in Indah Pusaka Sdn. Bhd 

2. Deemed interested by virtue of their interest in Warisan Jutamas pursuant to Section 6A of the Act. 

18

3. Deemed interested by virtue of its (i) deemed interest in Berjaya Capital Berhad, the holding company of Berjaya Sompo Insurance Berhad and Prime Credit 

Leasing Sdn Bhd; and (ii) interest in Berjaya Land Berhad, the holding company of Selat Makmur Sdn Bhd. 

4. Deemed interested by virtue of its interest in Berjaya Sompo Insurance Berhad and Prime Credit Leasing Sdn Bhd. 

5. Deemed interested by virtue of its interest in Berjaya Capital Berhad, the holding company of Berjaya Sompo Insurance Berhad and Prime Credit Leasing Sdn 

Bhd. 

6. Deemed interested by virtue of its interest in Juara Sejati Sdn Bhd, Berjaya Sompo Insurance Berhad, Prime Credit Leasing Sdn. Bhd. and Selat Makmur Sdn. 

Bhd. 

7. Deemed interested by virtue of its interest in Berjaya Group Berhad 

8. Deemed interested by virtue of their interests in Berjaya Corporation Berhad. 


19

5. DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTERESTS 

Save for the proportionate increase in the percentage of shareholding and/or voting rights in their 

capacity as the shareholders of the Company, pursuant to the Proposed Share Buy-Back, none of the 

Directors, substantial shareholders and/or persons connected to them have any interest, direct or 

indirect, in the Proposed Share Buy-Back and/or resale of treasury shares. 

6. DIRECTORS’ RECOMMENDATION 

Our Board, having considered all aspects of the Proposed Share Buy-Back, is of the opinion that the 

Proposed Share Buy-Back is in the best interest of the REDtone Group and accordingly recommends 

that you vote in favour of the Proposed Share Buy-Back at the forthcoming AGM. 

7. APPROVAL REQUIRED 

8. AGM 

The Proposed Share Buy-Back is subject to the approval of the shareholders at the forthcoming AGM. 

We will hold our AGM at Anggerik Room, 4 th Floor, Hotel Equatorial, Jalan Sultan Ismail, 50250 

Kuala Lumpur on Wednesday, 28 October 2009 at 10.00 a.m. for the purpose of considering and, 

if thought fit, passing the resolution to give effect to the Proposed Share Buy-Back. The Notice of 

the AGM is enclosed in the Annual Report for the financial year ended 31 May 2009 which is 

dispatched together with this Circular. 

If you are unable to attend and vote in person at our forthcoming AGM, please complete, sign and 

return the Form of Proxy enclosed in the Annual Report for the financial year ended 31 May 2009 

dispatched together with this Circular in accordance with the instructions printed on it, as soon as 

possible and, in any event, so as to arrive at our Registered Office at Level 18, The Gardens North 

Tower, Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur not less than forty eight (48) 

hours before the time and date fixed for our forthcoming AGM or any adjournment thereof. If you 

have lodged the Form of Proxy, you may still attend and vote at our forthcoming AGM if you 

subsequently wish to do so. 

9. FURTHER INFORMATION 

Shareholders are advised to refer to the Appendix of this Circular for further information. 

Yours faithfully, 

for and on behalf of the Board of 


WEI CHUAN BENG 

Managing Director 

20

FURTHER INFORMATION 

1. Directors’ Responsibility Statement 

21 

APPENDIX 

Our Directors have seen and approved this Circular and they, collectively and individually, accept 

full responsibility for the accuracy of the information given and confirm that, after making all 

reasonable enquiries, to the best of their knowledge and belief, there are no false or misleading 

information or other facts which, if omitted, would make any statement herein false or misleading. 

2. Material Contracts 

Save as disclosed below, there are no material contracts, not being contracts entered into in the 

ordinary course of business, which have been entered into by the Company or its subsidiaries 

within 2 years immediately preceding the date of this Circular: 

No. Date Material Contracts 

1 25 March 2008 VMS Technology Limited (”VMSTL”) and REDtone 

Telecommunications Sdn Bhd (“RTSB”), wholly-owned 

subsidiaries of REDtone entered into the following agreements: 

(a) Business Agreement between VMSTL, Hotgate Holdings 

Ltd (“HHL”), Michael Yang Chee Hong (“MY”), Hotgate 

Technology (M) Sdn Bhd (“HTM”), Beijing Sino Zhaotong 

Public Information Network Development Co. Ltd 

(“CCPI”), Beijing Chenghuaitang Advertising Art Co Ltd, 

Ma Xiaotian, Hoon Heh, Song Lianyu and Suzhou 

Kangyu Communication Equipment Co. Ltd. (collectively 

known as “CCPI’s Shareholders”); 

(b) BTB Agreement between VMSTL, CCPI and HTM; and 

(c) Shareholders Agreement between HHL, MY, RTSB, 

Pang Wee Tak, Alvin James and CCPI’s Shareholders. 

(collectively known as “Agreements”). 

In this agreement, HHL shall acquire the entire issued and fully 

paid-up share capital of VMSTL from RTSB for a total purchase 

consideration of USD300,000 satisfied by the issuance of 

30,000,000 new ordinary shares of USD0.01 each in HHL. 

Thus, VMSTL shall cease to be a subsidiary of REDtone. 

2 28 April 2008 RTSB (as vendor) entered into a business acquisition 

agreement with eB Capital Berhad (“eBCap”) and its wholly 

owned subsidiary, eBT (as purchaser) for the disposal of 

RTSB’s data communication services business in Peninsular 

Malaysia for a disposal consideration of RM20,000,000, to be 

satisfied by the issuance of 130,000,000 new ordinary shares 

of RM0.10 each in eBCap and RM7,000,000 nominal value of 

irredeemable convertible unsecured loan stock of eBCap. 

3 25 May 2008 REDtone, through its wholly-owned subsidiary, RMMSB, had 

entered into the Shareholders Agreement with Club Excellence 

(M) Sdn Bhd (“CESB”) in respect of DMH (“SA DMH”). 

Consequently, DMH entered into a Shareholders Agreement 

with Zhong Nan Enterprise (M) Sdn. Bhd. in respect of DM to

4 26 September 

2008 

5 22 December 

2008 

jointly invest into DM for the purpose of venturing into the 

business of providing internet protocol television and internet 

protocol related business activities in Malaysia, Singapore, 

Indonesia, Thailand, Myanmar, Philippines, Cambodia, 

Vietnam and Taiwan. The investments made through the SA 

DMH has resulted in DMH being a subsidiary of RMMSB, and 

DM a subsidiary of DMH. 

REDtone, through its wholly-owned subsidiary, RT, had 

entered into the Share Sale Agreement with Yong Kok Leong 

for the disposal of 75 ordinary shares of RM1.00 each, 

representing 75% of the issued and paid-up share capital in 

CSB for a total cash consideration of RM1.00. 

REDtone, through its wholly-owned subsidiaries, RT and RTC 

entered into a Share Sale Agreement with Quantum Global 

Networks, Inc (“Quantum”) for the proposed disposal by RT 

and RTC of 90 and 10 REDtone Telecommunications Pakistan 

(Private) Limited (“RTPL”) Shares, representing 90% and 10% 

respectively of the issued and paid-up share capital of RTPL, to 

Quantum for a total cash consideration of USD3,650,000 

6 24 August 2009 REDtone, through its 54.99% owned subsidiary, DM entered 

into a Collaboration Agreement with China International 

Communications Co. Ltd to broadcast television package 

services which enrols fifteen (15) different international 

channels from China Central Television, China local television 

and other overseas television services in Malaysia. 

3. Material Litigation 

The Group is not engaged in any material litigation, claims or arbitration and the Directors have 

no knowledge of any fact likely to give rise to any proceedings which might materially affect the 

position of the business of the Group. 

4. Corporate Proposals Which Have Been Announced But Not Yet Completed 

Save as disclosed below, we do not have any other intended corporate exercises/scheme which 

have been announced but not yet completed as at 16 September 2009 (being the latest 

practicable date prior to the printing of this Circular): 

(i) On 31 July 2007, CIMB Investment Bank Berhad, on behalf of our Board, announced that 

our Company proposes to implement the following: 

(a) proposed special issue of up to 172,550,000 new REDtone Shares to 

Bumiputera investors to be approved by the MITI at an issue price to be 

determined later (“Proposed Special Issue”); 

(b) proposed bonus issue of up to 235,340,000 new REDtone Shares, to be credited 

as fully paid-up on the basis of 2 new REDtone Shares for every 5 existing 

REDtone Shares held on an entitlement date to be determined later upon 

completion of the Proposed Special Issue (“Proposed Bonus Issue”); 

(c) proposed transfer of listing from the MESDAQ Market (now known as ACE 

Market) of Bursa Securities to the Main Board (now known as Main Market) of 

Bursa Securities (“Proposed Transfer Listing”), 

(collectively referred to as the “Proposals”). 

22

On 31 October 2007, our Board had announced that, in view of the deviation of RM4.963 

million between the audited profit after taxation and minority interest (“PATMI”) of our 

Group for the financial year ended 31 May 2007 of RM5.562 million compared to the 

unaudited PATMI of our Group for the financial year ended 31 May 2007 of RM10.525 

million, which was stated in the announcement of our Group’s fourth quarter results made 

on 31 July 2007, the Proposed Transfer Listing will be postponed until such time that our 

Group is able to meet the relevant profit requirements. 

The Proposed Bonus Issue is conditional upon the Proposed Special Issue. Save for the 

foregoing, the Proposals are not conditional upon any other corporate exercise/scheme. 

(ii) On 10 September 2009, our Board announced that we intend to seek shareholders’ 

approval at the forthcoming AGM for the following: 

(a) Proposed Shareholders’ Mandate; and 

(b) Proposed Share Buy-Back. 

5. Historical Share Prices 

The following table sets out the monthly high and low market prices of our Shares as traded on 

the MESDAQ and ACE Market of Bursa Securities for the past 12 months from September 2008 

to August 2009 as follows: 

2008 

23 

High 

RM 

September 0.50 0.36 

October 0.43 0.24 

November 0.35 0.20 

December 

2009 

0.23 0.17 

January 0.22 0.19 

February 0.20 0.18 

March 0.18 0.15 

April 0.34 0.16 

May 0.28 0.20 

June 0.30 0.21 

July 0.27 0.20 

August 0.27 0.23 

Last transacted market price of REDtone Shares on 9 September 2009 

(being the day prior to the date of announcement of the Proposed Share Buy-Back) 

Last transacted market price of REDtone Shares on 16 September 2009 

(being the latest practicable date prior to the printing of this Circular) 

(Source: Bloomberg) 

Low 

RM 

RM0.24 

RM0.23

6. Documents Available for Inspection 

The following documents (or copies thereof) are available at our registered office during normal 

business hours on Mondays to Fridays (except public holiday) from the date of this Circular up to 

and including the date of the AGM: 

(i) our Memorandum and Articles of Association; 

(ii) audited financial statements of REDtone Group for the past 2 financial years ended 31 

May 2008 and 31 May 2009; 

(iii) material contracts referred to in Section 2 above; 


24

redtone international berhad - Announcements - Bursa Malaysia

Create successful ePaper yourself

Delete template?

Save as template?