asic tosses hot potato to the asx ltd

Dear friends in the good fight for probity in the OIP/GGX merger. It seems that when the going gets tough for ASIC in answering questions relating to proper process, ASIC tosses the hot potato to ASX Ltd, perhaps hoping that the questioner will give up the fight.

Here follows this questioner's quest for answers from the ASX Ltd for your information. (In those copies I changed my real name to my HC name as I understand is the correct protocol on this forum.) I shall keep you posted on the reply.

Regards, Fairgopat

--- Original Message <-- Today's email to ASX Ltd
From: "Fairgopat"
To: [email protected]
Sent: Tuesday, February 09, 2010 12:12 PM
Subj: CLARIFICATION ON ASX LISTING RULE 10.1

Dear ASX Customer Service Manager,

After an extended email exchange with ASIC Lawyer Elizabeth Korpi in regard to the merger of OIP and GGX, I received the following advice from her:

"Thank you for your email. The ASX Ltd is the body responsible for ensuring listed entities comply with their obligations under ASX Listing Rules. As previously advised we are not in a position to provide you with legal advice on how ASX Listing Rule 10.1 applies in these circumstances...."

So that AXX Ltd may be fully appraised on the issue that I raised and discussed with Elizabeth Korpi at length which I now offer for the advice of ASX Ltd on the interpretation of ASX Rule 10.1, I would be grateful if you would examine copies of the relevant emails below. The questions for which I am seeking clarification are in the emails dated 23rd January and 31st January 2010.

Regards
"Fairgopat"
Foundation Shareholder in OIP
==============================================

----- Original Message -----
From: Elizabeth Korpi
To: "Fairgopat"
Cc: Claire LaBouchardiere
Sent: Tuesday, December 22, 2009 12:34 PM
Subject: Orion Petroleum Limited & Gas2Grid Limited [SEC=IN-CONFIDENCE]


Dear Mr "Fairgopat"

Please find enclosed a letter in response to your email correspondence to ASIC on 19 November 2009, 9 and 15 December 2009 in relation to Gas2Grid Limited's proposal to merge with Orion Petroleum Limited by way of a scheme of arrangement.

Regards

Elizabeth


----- Original Message -----
From: "Fairgopat"
To: Elizabeth Korpi
Cc: Claire LaBouchardiere ; Christie Furness
Sent: Saturday, January 23, 2010 2:00 PM
Subject: Re: Orion Petroleum Limited & Gas2Grid Limited... URGENT

Dear Elizabeth Korpi,

Thank you for your letter and invitation for further discussion.

I note your advice that the vote by OIP shareholders on Dennis Morton's 30.4 million GGX shares being acquired by OIP (Resolution 1) will in fact be a vote by OIP shareholders on the OIP/GGX merger itself.

I note in the Notice of Meeting documents that:

"The Company will disregard any votes cast on Resolution 1 by:
Dennis Morton and/or Burnside Pty Limited; and
Any associate of either or both of Mr Dennis Morton and Burnside Pty Limited."

Please correct me if I am mistaken, but the reason for that exclusion is that Dennis Morton is a shareholder in OIP while at the same time he is also a shareholder in GGX and as such he has a conflict of interest in voting on a resolution as put by the OIP Board in relation to OIP acquiring GGX shares. Were he to exercise his vote in regards to Resolution 1 as an OIP shareholder, Dennis Morton would be accused of Misconduct.

It is his dual shareholding that creates his conflict of interest and NOT his being the Chairman of OIP. Please confirm.

However a large number of OIP's top 20 shareholders are also shareholders in GGX. Like Dennis Morton they will also have a conflict of interest in exercising their vote in relation to Resolution 1.

The question for which I seek an answer from ASIC's Corporations Team is thus: Should those OIP shareholders who, like Dennis Morton, also hold shares in GGX also be excluded from voting on Resolution 1?

Because the General Meeting of shareholders of OIP is for 11am this coming Wednesday 27th January, an expeditious reply would be much appreciated and as well, if necessary, advice to the Chairman of that meeting.

Regards
"Fairgopat"
Foundation Shareholder in OIP

----- Original Message -----
From: Elizabeth Korpi
To: "Fairgopat"
Cc: Christie Furness ; Claire LaBouchardiere
Sent: Friday, January 29, 2010 9:31 AM
Subject: Re: OIP & GGX...MORE CONTEXT TO ILLUMINATE THE MERGER [SEC=IN-CONFIDENCE]

Dear Mr "Fairgopat"

Thank you for your emails.

In your email of 23 January 2010 you state that "I note your advice that the vote by OIP shareholders on Dennis Morton's 30.4 million GGX shares being acquired by OIP (Resolution 1) will in fact be a vote by OIP shareholders on the OIP/GGX merger itself." However, in our letter to you dated 22 December 2009 it states that "we note that OIP will be seeking shareholder approval under ASX Listing Rule 10.1 (LR 10.1) in relation to the acquisition by OIP of Gas2Grid shares and Gas2Grid options held by OIP's chairman Mr Dennis Morton and a company associated with Mr Morton."Our letter did not provide you with advice to the effect that Resolution 1 will be a vote by OIP shareholders on the OIP/Gas2Grid merger.

ASIC is not able to provide you with legal advice. However, in relation to your specific query, we note that Resolution 1 is a resolution under ASX Listing Rule 10.1 under which approval is required when a company acquires a substantial asset from a related party. ASX Listing Rules 10.10 and 14.11.1 provide that a person is to be excluded from voting if they are a party to the transaction, ie. the acquisition of a substantial asset from a related party.

After careful consideration ASIC has decided that we will not take any further action into the issues you have raised in your emails at this time.

ASIC conducts an assessment of every complaint we receive. In determining which matters we will select for further action consideration is given to a range of factors, including the likely regulatory effect of any available action.

We have recorded the information you have provided in our confidential internal database. This information will assist us if we receive further similar complaints.

Although we have decided not to investigate your complaint at this time, this does not prevent you from pursuing any civil remedies otherwise available to you. Your legal adviser can provide you with more information about what other options may be open to you to pursue this matter privately.

Yours sincerely

Elizabeth

----- Original Message -----
From: "Fairgopat"
To: Elizabeth Korpi
Cc: Christie Furness ; Claire LaBouchardiere
Sent: Sunday, January 31, 2010 10:48 PM
Subject: Re: OIP & GGX...MORE CONTEXT TO ILLUMINATE THE MERGER [SEC=IN-CONFIDENCE]


Dear Elizabeth Korpi,

Thank you for recording all of the information that I have supplied and for your reply and explanation of ASX Listing Rule 10.1.

If you don't mind I would appreciate some further clarification on the provisions of that ASX Rule 10.1.

It seems that conflict of interest under ASX Listing Rule 10.1 only applies to those OIP shareholders with "substantial assets" in the "related party" and not to those with lesser holdings. Is that correct?

If that is so please explain what constitutes a "substantial asset"? In this case how many GGX shares would be considered to be a "substantial asset"?

It follows then that exclusion should apply to all those OIP shareholders who hold a "substantial asset" in GGX shares rather than just Dennis Morton.

One such OIP shareholder could be Octanex whose MD and Chairman of the Board, Geoff Albers controls 6.1 million GGX shares. Would that number be a "substantial asset" under ASX Listing Rule 10.1? If so then it would be reasonable to expect that his vote would be excluded.

There may be more, perhaps many more OIP shareholders like Dennis Morton and Geoff Albers who hold a "substantial asset" in GGX shares. Who would have the responsibility of identifying all those OIP shareholders who hold a "substantial asset" in GGX shares? And who would be responsible for declaring their exclusion from voting?

Perhaps all OIP shareholders who vote on the merger should be required to disclose their holdings in GGX so that judgements can be made as to whether their holdings constitute a "substantial asset" under ASX Listing Rule 10.1?

Furthermore there is something inherently unfair and discriminatory in the application of ASX Listing Rule 10.1. All OIP shareholders who hold shares in GGX have a conflict of interest when voting on Resolution 1, yet it will only be those who have a "substantial asset" in GGX shares whose vote will be excluded. All those OIP shareholders who individually hold less than a "substantial asset" in GGX shares will not be excluded.

Yet collectively the latter are likely to hold many more times a "substantial asset" in GGX shares. It seems that their vote will be acceptable even though collectively they will be as much conflicted as Dennis Morton... perhaps even more so! This Rule seems to be making two classes of shareholders whose votes are treated differently. The application of the Rule seems to be discriminatory. Now that doesn't seem at all fair!

Your clarifications on the above matters would be much appreciated.

Regards
"Fairgopat"
Long term OIP shareholder

FINALLY OVER TO THE ASX LTD !

----- Original Message -----
From: Elizabeth Korpi
To: "Fairgopat"
Cc: Christie Furness ; Claire LaBouchardiere
Sent: Monday, February 01, 2010 3:53 PM
Subject: Re: OIP & GGX...MORE CONTEXT TO ILLUMINATE THE MERGER [SEC=IN-CONFIDENCE]

Dear Mr "Fairgopat"

Thank you for your email. The ASX Ltd is the body responsible for ensuring listed entities comply with their obligations under ASX Listing Rules. As previously advised we are not in a position to provide you with legal advice on how ASX Listing Rule 10.1 applies in these circumstances. You may wish to obtain your own legal advice on the application of the ASX Listing Rules in this situation.

Your sincerely

Elizabeth Korpi