When I was a kid my father told me that the greatest respect you can have is not public recognition but that of your peers. It is that respect that is most meaningful.
Many years ago I watched Billy Connolly in The Secret Policeman's Ball. He talked about his first drink of whiskey and he just went off on this tangent but he was great. I then realised that great comedians, not the one liners, were great story tellers. I could never be a great comedian because I would just forget where I was in the story.
The current Board of EGO must be wondering how did we get here and how did it come to this? ERM stated that it has called for an Extraordinary Meeting to oust the majority of the EGO Board because it had run out of patience. For me it is something simpler and hopefully this may help to explain it.
For me the saga started over eighteen months ago. EGO had become a discoverer, moving from being an explorer after finding gas not far out of Perth. The share priced rose to almost five cents, the Company was going gangbusters.
The first sign of trouble for me was when some members of the Board exercised their share rights, and sold them. That's their right to do so - no argument - but from a shareholder / investor, it wasn't a good look.
It wasn't long after that shareholders discovered a link with what became known as the Yellow Group of Companies and that a previously undisclosed link came to light. This link included two JV Partners and an Australian Subsidiary Company that shared the same office address as EGO. The undisclosed link was the MD of EGO.
The Annual Report came out that showed despite the Company not really making a zac our Directors had been paid salaries I believed were quite high. When the profits from sale of rights was calculated in, one Director's package was over a million dollars.
Then came the KEY Deal. Out of left field came the announcement that EGO didn't have the time to explore the Northern Western Australia area and had sold exploration rights to KEY in return for shares in that company and access to some exploration sites further south. To protect the interests of EGO's interest in KEY (EGO was and is the biggest shareholder)the MD of EGO was appointed to the Board of KEY as its Chairman, the MD of EGO - now the Chairman of KEY also became a consultant to that company along with another EGO Board member and consultant. This was despite shareholders being told that EGO didn't have time to pursue those exploration sites. Apart from receiving a Directors Fee for Chairing the Board and consulting fees, the MD of EGO also sought in addition to be issued shares in KEY. They were never activated due to the Chairman of KEY resigning before they could be approved. In addition, the son of the Chairman of KEY - the MD of EGO - was appointed as the MD of KEY. The Chairman of KEY -the MD of EGO - claimed he had no knowledge prior to the appointment.
There were several further Share Issues / Capital Raisings during this period further diluting shareholdings. Some CR's were restricted to what was described as "Sophisticated Investors" who generally bought the shares at a discounted rate and sold them for a profit excluding current small investors from the process.
There was then the issueing of two writs by three of the four company Directors for alleged defamatory posts on this site. The Company Solicitor was not used for this process but a QC Barrister. Shareholders were told that this was a private matter between the Directors named in the action and the two shareholders named in the writs.
A meeting was called to oust the Board and this was held. A Chairman was elected to conduct the meeting, the same person engaged privately by the three Directors to conduct the legal action. So the Directors of the Board were being challenged for their position appointed the person acting for them in a private matter to Chair the meeting and that person rejected calls to step aside.
Shortly afterward another challenge for Board control was launched and also defeated. Once this meeting was finished a number of Concerns Notices were issued by the three Directors in this private defamation dispute. This action was only disclosed after the AGM.
As this was also playing out, the daughter of the MD had returned from England and was employed by EGO. Shareholders were never notified / informed of this appointment. In fact - the subterfuge that went on with names and what can best be described as the clandestine appointment raises eyebrows and it isnt until the Annual Report that shareholders learn that she was paid over $106,000 for six months work. She remains employed by EGO as a consultant at what rate of pay we don't know, and is also a consultant for KEY where her brother is the MD and for what rate of pay we don't know.
The Red Gully facility is delayed by a dispute with the land holder resulting in the JV purchasing the property outright. Cost over runs of about $15,000,000 and time significant time delays disrupt income generating operations. There is then a deemed withdrawal by a JV Partner which has now realised Supreme Court Action. Company updates are provided after target dates for completion have passed.
Then there is the Annual Report where we the shareholders learn two things.
Despite being constantly told that the defamtion action, launched by three of the four directors was a private one we are then told in the Annual Report that an almost ten fold increase in legal fees is due to the Directors being indemnified by the Board for that legal action. So I, as a shareholder, have paid the legal fees - approved by the Board - to suit myself. (Its almost an Austin Powers moment - allow myself to introduce myself). Recovered moniesare being applied against those fees leaving quite a significant shortfall.
The other thing is despite another twelve months to run on his consultant contract the MD has negotiated with the Board a new employment contract which has the potential to significantly increase his salary.
Given this it isnt difficult to understand why I support the application of ERM.
What I have to say to the aspirants is this - DON'T FORGET ABOUT US -
EGO Price at posting:
1.5¢ Sentiment: Buy Disclosure: Held
