Privately-held IMC Resources has broken its silence on events surrounding Atlas Iron's shareholder meeting, disputing claims that it swayed stakeholders to vote against the re-election of chairman David Nixon.
In a prepared statement, IMC said it wanted to set the record straight regarding the "misinformation and speculation" following Atlas' annual general meeting held less than two weeks ago.
Atlas managing director David Flanagan previously said that IMC had swayed major shareholder Linq Resources Fund at the last minute to vote against the re-election of Mr Nixon. Other rumours that swirled was that IMC was unhappy that it did not secure an off-take deal with Atlas.
However IMC said today that there were no "last minute discussions" that influenced voting.
Overall, IMC voted against one resolution, the re-election of Mr Nixon, and abstained from voting in another, the adoption of the remuneration report, signaling its concern to the Atlas board.
In the case of Mr Nixon, IMC stated that its vote was not influenced by current off-take agreement negotiations.
"Rather IMC was not comfortable with the stewardship, mentoring and culture of the the former chairman... and used its vote to express its displeasure," IMC said.
With the remuneration report, IMC said it abstained from voting because "it believed that the proposed >75% increase of the salary of the managing director after 30 June 2008 is out of step with current financial prudence".
The resolution was not carried with 27.6 million votes casted against it compared to 21.3 million voting in favour.
Additionally, IMC, which is headquartered in Singapore, said it would have voted against resolution three which sought to grant Mr Flanagan 500,000 options at a strike price of some 50 cents.
The resolution was withdrawn prior to the meeting.
"IMC will continue to monitor the situation with all its investments, particularly given the volatile financial and market situation currently being experienced throughout the world," IMC chief executive Jyn Baker said.
"Ultimately, a combination of financial and strategic factors will determine whether IMC is a buyer, seller or holder of its investments. No decision has been taken by the board of IMC regarding its intentions to Atlas Iron."
Ms Baker also sits on the board of Atlas.
Mr Flanagan was unavailable for comment at time of publishing.
Below is the IMC statement:
IMC wishes to set the record straight regarding misinformation and speculation in the marketplace following the Atlas Iron Limited Annual General Meeting (AGM) held on Friday November 21.
IMC's decision to vote in the way it did at the AGM was made independently of any other shareholder.
There were no last minute discussions, as suggested by some ill-informed people, that influenced voting.
Atlas Iron was informed of IMC's position immediately after IMC's directors decided on 19 November 2008 on a course of action regarding the AGM.
IMC owns 19.5% of Atlas Iron and used its holding to vote on Resolutions 1, 2 and 3 as follows:
Resolution 1 dealt with the adoption of the Remuneration Report for the year ended 30 June 2008. IMC abstained from voting because it believes that the proposed >75% increase of the salary of the Managing Director after 30 June 2008 is out of step with current financial prudence.
In any event, Resolution 1 was voted against by a majority of shareholders, excluding IMC.
IMC's decision to abstain from voting was a signal to the Atlas Iron Board of its concern. Resolution 2 dealt with the re-election of John David Nixon to the Board of Atlas Iron.
IMC voted against the re-election of Mr Nixon.
The IMC vote was not influenced by any current off take agreement negotiations, as suggested by some commentators. Rather IMC was not comfortable with the stewardship, mentoring and culture of the former chairman (John David Nixon) and used its vote to express its displeasure.
As IMC is a significant shareholder of Atlas Iron, the law requires any arrangement including offtake agreements with IMC to be approved by the other shareholders of Atlas Iron. IMC has always accepted that any such arrangement, including offtake, must be at arms' length and commercially competitive.
Resolution 3, which was withdrawn at the AGM, sought to grant David Flanagan (Managing Director, Atlas Iron) 500,000 options at a very low strike price of around 50 cents. IMC was only one of many shareholders exercising a total of 92 million votes against Resolution 3 versus 21 million votes for.
IMC believes the granting of these options, with such a low hurdle, is also out of step with current financial prudence. Nor is it aligned with the best interests of all shareholders.
IMC Resources CEO, Ms Jyn Sim Baker, said "IMC will continue to monitor the situation with all its investments, particularly given the volatile financial and market situation currently being experienced throughout the world."
"Ultimately, a combination of financial and strategic factors will determine whether IMC is a buyer, seller or holder of its investments. No decision has been taken by the board of IMC regarding its intentions to Atlas Iron," she said.
Ms Jyn Sim Baker stressed that IMC believes Atlas Iron, if properly and prudently managed, has a promising future and IMC will continue to work with the Atlas Iron board to maximise its potential."
AGO Price at posting:
70.0¢ Sentiment: Buy Disclosure: Held
