THE board of cashbox Molopo Energy has started its defence against a plan to roll the board and take control of the company’s considerable treasury with the board alleging Farooq Khan is trying to seize control of $67 million cash without offering shareholders a premium.
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Molopo's cash has basically been sitting in the bank since the company sold out of its North American oil and gas properties in 2014.
Shareholders will be asked to consider a resolution to remove the board at May's annual general meeting, and the board, recently revitalised under newly-installed interim executive chairman Alexandre **ovich, said the move by Khan was "calculated plan by two major shareholders to take control of Molopo and its significant cash balance without paying an appropriate premium for control".
"We do not want shareholders to be deprived of the value of your shares," **ovich told shareholders in a letter on Friday.
The board said it had a highly experienced and successful management team, and wanted to stay the course as it planned for a return to investing in oil and gas.
"With deep experience in the oil and gas sector, influential global networks and solid recent history of corporate governance, the current Board believes it remains best qualified to guide the company and that it has the right strategy to deliver the best outcome for shareholders," he said.
It had consolidated legacy legal action in Canada and was looking to invest in a buyer's market, where there were undervalued assets available.
The move has been orchestrated by Keybridge Capital, which holds 19.44%, and is under the control of Khan's Bentley Capital, and Australian Style Group, a company run by associate John Bolton.
Khan successfully seized control of the AXSX-listed Keybridge last year and then sold Aurora Funds Management to Keybridge executive director John Patton.
Aurora has since purchased a 17.89% interest in Molopo.
Keybridge and Aurora now hold a combined 37.33% interest in the company.
**ovich said the alliance seeking to seize control of the company included Nicholas Bolton, who had been disqualified by ASIC from acting as a director or taking part in the management of corporations for a period of three years by reason of breach of his duties as a director.
"The Molopo board is concerned that Keybridge and Aurora are working together in order to replace the members of the Molopo board with their own nominees to deliver effective control of Molopo, at both a board and shareholder level, to Keybridge and Aurora," **ovich said,
The nominees were all associated with Keybridge, and he said they were acting for Khan and Bolton to "launch a quasi-takeover where shareholders may receive no financial benefit or premium if they gain control".
He said he was not convinced that so-called "Chinese wall" arrangements between Keybridge and Aurora are adequate, and that there has been no comment from either about the future direction of the company. ""
MPO Price at posting:
17.0¢ Sentiment: None Disclosure: Held
