No suggestion even of a shareholder vote.....here is one link...

No suggestion even of a shareholder vote.....here is one link (and there are lots).....which is relevant here.

I have written to the company and ASIC......suggest if you hold this stock, to do the same.
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http://fido.asic.gov.au/fido/fido.nsf/byheadline/03-232+ASIC+acts+on+conflicts+of+interest?openDocument

DRAFT OF COMMENT TO OCV/ASIC


Extreme disappointment at announcement today.....whereby existing Board members stand to have significant gain, should this matter proceed.

Have you not heard of conflict of interest ? ......no suggestion even of a vote by shareholders.

I have written to ASIC to seek their intervention in this matter.

Note comment from ASIC in the following link here.

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http://fido.asic.gov.au/fido/fido.nsf/byheadline/03-232+ASIC+acts+on+conflicts+of+interest?openDocument

03-232 ASIC acts on conflicts of interest

Tuesday 22 July 2003


The Australian Securities and Investments Commission (ASIC) today announced the results of its program of reviewing related party disclosure documents sent to shareholders by public companies.

Under the Corporations Act (the Act), public companies need shareholder approval in order to give related parties a financial benefit that is not ‘at arms length’.

The Act requires that a company must dispatch sufficient material to shareholders to enable them decide if it is in the interests of the company to pass the proposed resolution. The documents must also be lodged with ASIC before they are sent to shareholders.

In the 2002/2003 financial year ASIC conducted detailed surveillance on over 52 sets of documents and required amendments to be made in 39 cases.

‘ASIC examines related party documents because it is vital shareholders have full and accurate information before they approve transactions where directors may have a conflict of interest from a commercial perspective’, ASIC Executive Director Policy and Markets Regulation, Mr Malcolm Rodgers said.

‘ASIC’s review has found some common defects in the material provided to shareholders’, Mr Rodgers said.

Related party documents most commonly fail to place a value on options being issued to directors or other related parties. ASIC considers that shareholders must know the value of the proposed benefit in order to make an informed decision about whether or not to approve the related party transaction.

ASIC believes that it is best practice to calculate the value of the options in accordance with the valuation model contained in the International Accounting Standards Board’s Exposure Draft ED 2 ‘Share-Based Payment’. All material assumptions used in the model should be clearly disclosed.

Use of this methodology was recommended in ASIC media release 03-202, issued 30 June, (Valuing Options for Directors and Executives) in the context of disclosure in the directors report of the company.

Other information which is material to shareholders’ decisions about whether to approve a proposed grant of options or issue of shares to a related party will often include:
details of other remuneration already being received by the related party,
the extent to which shareholders’ interests will be diluted if shares are being issued or when options are exercised;
the basis used for valuing any shares to be issued under the transaction;
shares or options currently held by the related party; and
the company’s share price history over the last year.
This information enables a shareholder to see the proposed benefit in full context.

It may also be appropriate to include an independent expert’s report on the proposed transaction. Directors should ensure that the expert is adequately qualified to provide the type of report being presented.

Additionally, ASIC has found that disclosure is often inadequate in situations where a company proposes to acquire a business from a related party.

In such cases, ASIC considers that the law requires prospectus type comprehensive disclosure to be made to shareholders. This includes disclosure of the risks, the business’ track record, and any assumptions underpinning forecasts or valuations.
End of release