the cmi story, page-17

I will continue here with another example of share trades conducted by Ray Catelan, the Managing Director of CMI.

Section 256C(2) of the Corporations Act states:

"If the (share capital) reduction is a selective reduction it must be approved by (a) a special resolution passed at a general meeting of the company with no votes being cast in favour of the resolution by any person who is to receive consideration as part of the reduction..."

What this means is that any person who held both classes of shares could not vote his ordinary shares in favour of the buyback resolution at the combined meeting of shareholders.

On 31 July 2009, CMI Limited announced the second buyback of CMIPC shares through a selective capital reduction.

On 8 September 2009, the market was advised that companies controlled by Ray Catelan had sold their complete holdings of 2,069,636 CMIPC shares so that Ray Catelan held only ordinary shares at that point in time. The effect of these sales was that Ray Catelan could now vote his 12 million odd ordinary shares in favour of the selective capital reduction.

The annual report was released at the end of September and it showed that the buyer of all of those shares was Zazu Holdings Pty Ltd.

In the notice of meeting for the buyback, shareholders were told that CMI Limited had reached a voting agreement with Zazu Holdings Pty Ltd who supported the proposal and agreed to the proposed transaction. At no stage did the company inform shareholders as to who were the controllers of Zazu.

A company search showed that the directors of Zazu Holdings Pty Ltd were Denis and Janice Catelan. Denis is, I understand, Rays brother.

On 20 November 2009, shareholders at the CMIPC meeting voted down the buyback.

On 14 December 2009, Ray Catelan advised the market that he had bought 2,069,636 CMIPC shares restoring the holding that he had held prior to the September sale.


GPASAS