Now for part II of the "response to Shareholders Enquiries"
The company decided not to release the "settlement and release deed" document- despite shareholder request. In what can only be decribed as minority opression the company actually voted down the minorities form access to the document in a unipolar Special General Meeting.
The elaborate response from the company in the ASX release supposedly answering shareholder questions is intentionally overexpanding on the Okap parties resignation and consciously avoiding any discussion of IOP settlement. The whole contorted reply can perhaps be summarised in their statemtent that "Okap Parties release has come into effect, whilst the Company release has not and cannot come into effect because of the failure of one or more of the Conditions to be satisfied or waived" -- It is this latter matter ("company release" ) or failure that is the bone of contention. That at its inception the 'settlement and release deed' did not need to be voluntarily released to the market, is a valid point and is not what minorities asked for. But once the failure of the Okap parties to satisfy their component of the settlement (IOP settlement) in september 2014 -the matter became significantly material to the company. While things stayed in limbo for about 18months the board had a fiduciary duty to:
1) undertake steps at its disposal to expedite the IOP settlement (the outcome of which indeed had a material effect on the company because it held control on 10% of the tubatse farm - Hooperkrantz; as a mining entity this adds to the net assets available to the company and (
see section 3.15 of this ASX guidance note)-
--> the magnitude of its material effect and the domino effect this act (of ommision of the boards fiduciary duty to execute remedies available to it to ensure settlement of the IOP issue in time) is exmplified by IOPs recent Summons in the high court claiming damages to the tune of 45million dollars
2)The Board also had a duty to reclaim 2.5million in Okap funds to the company books -- the fact that this repayment has only been requested now indicates the callousness of the board
3) There is also available evidence to suggest that only 300K was rquired to settle the IOP matter -- so why was 2.5million of investor funds designated for the purpose?
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Rather than discuss the matter in an amicable manner with minorities an approach to conceal the document generates significant concerns about why was the company adamant and hegemonistic in its approach to stop the release of the documet
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FURTHER DOWN ARE MY UNDERSTANDING OF THE LEGAL IMPLICATIONS OF THIS
Would the fact that no action was taken to expedite resolution of th IOP matter Once the time frame for exection of the deal elapsed) have a material effect on investors decision on holding onto or selling the options -- I think so. Let alone that inordinate delays have decimated value in the price of the underlying scrip and that 2.5million dollars of investor funds were held in Okap accounts under trust and that the nonpayment of promised monies to IOP formed grounds for IOP to further lodge a claim to the tune of 45million dollars (that was released to market by the company).-- to say that none of the above bear material effect on a Division 3 financial product issued by the company is naive if not manipulative
Corporation act section 1042D clarifies that:
For the purposes of this Division, a reasonable person would be taken to expect information to have a
material effect on the price or value of particular Division 3 financial products if (and only if) the information would, or would be likely to, influence persons who commonly acquire Division 3 financial products in deciding whether or not to acquire or dispose of the first-mentioned financial products.
Under corporations act section 1042A the traded options are a division 3 financial product (
see subsection (e))-- In dealing with application of this division Section 1042B clarifies that the division can be applied to any company doing business in Austrlia irrespective of domicile
Can Nkwe be said to be carrying out business in australia?-- well Section 21 (2) a -clarifies that "establishing or using a share transfer office or share registration office in Australia, or in the State or Territory, as the case may be" is recognised as carrying out business in Australia
