Yeo’s departure seen having minor impact

PETALING JAYA: IOI Corp Bhd expects minimal disruption to its group operations following the resignation of group executive director Datuk Yeo How, which will take effect end-July.

A company spokesman said Yeo, had been instrumental in ensuring there was a strong management team and good corporate culture.

“Besides, group executive director Datuk Lee Yeow Chor, who oversees the group's operations, is also familiar with the areas covered by Yeo.

“Hence there should be minimal impact on group operations as his impending resignation had already been discussed awhile back,” she told StarBiz yesterday.

On Tuesday, IOI Corp announced Yeo would be leaving the group to pursue a new career. It was learnt Yeo could have accepted a job offer by a Singapore-based plantation group.

Credit Suisse Research said in a note to clients yesterday IOI Corp's valuation premium was affected on concerns over Yeo's departure.

It said the “delicate balance” between executive chairman Tan Sri Lee Shin Cheng's entrepreneurship and Yeo's good capital management and corporate governance would be affected. It downgraded IOI Corp to underperform from outperform and cut its target price to RM7 from RM10.

However, the IOI Corp spokesman described Credit Suisse Research's comment and inference as unfair to the company and Yeo for his efforts in putting systems in place over the years.

Other analysts said although there might be a momentary spike in the IOI's share price, it was unlikely to be permanently impacted by this news.

RHB Research Institute said any knee-jerk reaction in IOI Corp's share price should be temporary, given that there was no change in substantial share ownership and Tan Sri Lee was still the main driver of the business.

“Yeo's personal shareholding in IOI Corp is only 0.01% and less than 0.01% for IOI Properties Bhd, so we don’t expect any potential major selldown of Esos (employee share option scheme) shares,” it said in a report.

RHB Research said Tan Sri Lee would already have someone in mind to replace Yeo and a likely candidate would be Yeow Chor, his eldest sonwho has been on the board since 1996. It maintains its outperform call with a fair value of RM9.35 per share.

IOI Corp closed 10 sen down at RM7.10. It was the most active counter with 13.52 million shares done.

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