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The board of EON Capital Bhd, owner of Malaysia’s seventh largest bank, will ask shareholders to vote on Hong Leong Bank Bhd’s RM5.06bil (US$1.6bil) takeover offer on Aug 19, according to a statement sent to Bursa Malaysia yesterday.

The move defies EON Cap’s biggest investor which has threatened to seek RM1.11bil in damages if the deal goes through at the current price.

Shareholders are divided over whether to accept an all-cash offer of RM7.30 a share from billionaire Tan Sri Quek Leng Chan’s Hong Leong Bank (HLB).

Primus Pacific Partners Ltd, a Hong Kong-based investment fund, is EON Cap’s biggest shareholder and opposes the deal, having paid RM9.55 a share for its 20% stake in 2008. That’s 31% more, or a difference of RM315mil, based on Bloomberg calculations.

Primus, which has one seat on EON Cap’s board, said it filed a lawsuit against its nine other directors on June 21, claiming they handled HLB’s bid improperly.

The High Court has fixed trial dates from Sept 20 to 28, more than a month after HLB’s offer is scheduled to lapse on Aug 15.

EON Cap rose 0.14% to close at RM6.94 yesterday. The FTSE Bursa Malaysia KLCI rose 0.03%.

HLB was unchanged at RM8.86.

An EON Cap takeover would help Quek create Malaysia’s fourth biggest banking group with assets of about RM121bil.

For the sale to go through, the board needs acceptances from 50% plus 1 share.

Government-owned Khazanah Nasional Bhd, the Employees Provident Fund, businessmen Rin Kei Mei and Tiong Hiew King jointly hold more than 50% of the shares, according to an EON Cap statement on May 21.

HLB’s offer was also dependent on the result of the Primus lawsuit and approval from the Finance Minister, EON said on July 7.

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Shares of power plant builder Mudajaya Group Bhd fell for a second day as jittery investors booked in profits from recent sharp gains on a news report that the company had been probed by the Securities Commission (SC).

Mudajaya told the exchange yesterday it “has not been directly queried by the SC” but assured investors that “it is more than willing to extend its full cooperation” if queried by the regulator.

“The board of Mudajaya is not aware of the nature of the complaint about the company by anyone whosoever,” it said in reply to the exchange’s query on the report published over the weekend.

The stock fell as much as 5.3% yesterday after trade resumed following a one-hour suspension from the opening bell to make way for the announcement.

Mudajaya shed 19 sen, or 3.2%, to close at RM5.69 on volume of 2.78 million shares.

The stock hit a record high of RM5.94 on Thursday, driven partly by speculation that a big independent power producer might buy a significant stake in the company.

Tanjong Plc, which was linked as a potential buyer, had said it had no interest in buying a stake in Mudajaya.

StarBiz made several calls yesterday to Mudajaya’s office in an attempt to get some clarification on the SC probe, but failed to speak to any of the company’s top officials.

A spokesman at the SC yesterday confirmed that the regulator was “looking into the affairs” of Mudajaya following a specific complaint made against the company but declined to elaborate.

It is believed that Mudajaya’s management had met analysts yesterday in a bid to allay some of the concerns raised about the company.

An analyst told StarBiz that the management was unaware of the nature of SC’s probe.

But despite the lack of clear details, he remained positive about Mudajaya’s future prospects because of its strong earnings growth potential and steady recurring income.

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Time Engineering Bhd had sold 40.3 million shares in unit Time dotCom Bhd (TdC) in the open market for RM20.8mil cash, the company told Bursa Malaysia yesterday.

This equals to a 1.59% stake in TdC. Time, however, did not disclose the timeframe when the transactions took place. The shares were part of the 726.18 million shares, or the 28.69% stake in TdC, held by Time that it had planned to sell.

The company had obtained shareholders’ approval at an EGM on Aug 21, 2009 to sell the shares at no less than 48 sen each. The mandate took effect from the date of the approval until the expiry of its redeemable secured loan stocks (RSLS).

The shares disposed to date were part TdC shares held by Time which have been pledged to Bank Pembangunan Malaysia Bhd (BPMB) as security for the 712.5 million RSLS at nominal value of 48 sen each issued to BPMB on June 11 last year.

“The disposal proceeds will be paid to BPMB for the redemption of the RSLS,’’ it said. Shares in TdC closed was flat at 52 sen yesterday. It was the most active counter with 50.9 million shares transacted.

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