THE turnout could be low for Ho Hup Construction Company Bhd's extraordinary general meeting (EGM) today to deliberate on the sale of two parcels of land for a total of RM12.9 million cash.

Irrespective of the turnout, the implications from the  meeting will to a large extent determine who is leading in the fight for Ho Hup that has seen two major shareholders — Datuk Vincent Lye Ek Seang and Datuk Low Tuck Choy — at loggerheads over the past few months.

Low recently advertised in newspapers claiming that the proposed sale of the two parcels of land — 5.5 acres in Balakong and 2.6 acres in Bukit Jalil — would be at below market value. But Ho Hup's management led by Lye has vehemently denied Low's contention.

The EGM would present a rare opportunity for minority shareholders to hear out what Lye and Low have to say, not only about the proposed land disposals but more importantly, their differing views on reviving Ho Hup, which needs restructuring as its shareholders funds are inadequate.

The dispute between Lye and Low should concern minority shareholders because it has kept bankers at bay and dampened Ho Hup's efforts to develop its landbank in Bukit Jalil, which is crucial for its revival. Given Lye and Low's almost equal shareholdings, minority shareholders' support is crucial if Ho Hup is to end the current stalemate.

Lye, who is deputy executive chairman of Ho Hup, controls 28% of the company while Low, a former managing director of Ho Hup and ousted by Lye, controls 26%. Low's father founded the construction outfit some 50 years ago.

It is not the first time that Lye and Low are in a boardroom fight.

A few months ago, Low blocked a proposal by the Lye-led management of Ho Hup to dispose of 10.9 acres of land in Bukit Jalil, to a subsidiary of Magna Prima Bhd for RM19.4 million cash. Low had voted against the deal via proxy forms ahead of the shareholders' meeting.

In the end, the Ho Hup management did not put the deal to shareholders as it knew that without the support of Low, it had no chance of being approved. Lye could not vote on the deal because he was deemed to be a related party due to his previous involvement in Magna Prima.

But the same cannot be said of today's EGM as both sides can vote. It is said that both parties have been accumulating shares of Ho Hup from the open market over the last few days to build up their votes. However, this could not be confirmed.

But whatever the outcome of the EGM, it will set the tone for further proxy fights in Ho Hup.

The next biggest one will probably be for Ho Hup's restructuring where the Lye-controlled management is proposing a scheme that entails a 95% capital reduction, rights issue and placement of new shares to investors identified by the board. The new investors would end up with more than 50% control of the company.

Such an exercise would significantly dilute existing shareholdings such as Low's and leave control of the company to new investors identified by the board.

Without doubt, Low will be against such a restructuring plan that could see the entry of new investors, possibly friendly to Lye, taking control of Ho Hup.

And for the minority shareholders, the question is whether the company needs to take a 95% haircut when it has assets such as 60 acres in Bukit Jalil.

In a nutshell, this New Year's eve EGM would be a good platform for Ho Hup shareholders to hear out the stories from both Lye and Low. But after that, they must choose who they support to lift Ho Hup out of its shareholder stalemate.