my views on the agm

Well, this will be my last post on MSC.

Based upon what i saw and heard at yesterdays AGM, I sold my holding & took my losses.

Let me state quite clearly that in disclosing this, and the commentary below about the AGM, it is all simply my own opinion and I am not advocating any particular course of action to anyone else.

The overall feeling I took away was that the Board and Senior executives of the co are variously incompetent and/or consider shareholder funds as their personal cookie jar. In addition, the main functional focus of the management seems to be simply on raising capital while they run around chasing a myriad of deals, none of which ever seem to come to fruition for one reason or another. But on to the AGM report.

One of the early matters Vic touched on was that MSC has a number of customers keen to place bulk orders however the co does not have sufficient funds (need approx $10m) to produce the product to fill those orders. He disclosed that he is heading to London in December where he has 3 brokers lined up to discuss resurrecting the float of ACC on the LOndon Exchange. The intention would be to obtain pre-ipo funds to help MSC kick things off. One thing he said really caught my attention, that part of that money would be used to fund a partial stock buy back for MSC for the reason that it gives the market a good impression!!!!

During the Remuneration Report discussion, I asked the question about the criteria that gave rise to Vic's remuneration of $921,000 last year. He responded that he was very upset that the report had presented the remuneration that way, that in fact he had only received approx $30k in salary and the rest in shares. He said the criteria for achieving the bonus payments was based on the succesful raising of capital.I have subsequently sent a letter to Doug Sutherland (again) asking him to verify that information to me. If indeed the information printed in the Annual Report is incorrect, it should be amended.

When the resolution about G. Birch's re-election came up, the Chairman asked for a vote on a show of hands, which was immediately objected to by a Chinese fellow who represented a large block of investors. He said he had lodged the proxies against the resolution and demanded a poll. Old Doug claimed he had not seen the proxy results and asked the Co Secretary to verify. Lo confirmed that the proxy votes were 3 to 1 against the re-election so the res was defeated. It was a big slap in the face to them all.

Next came the res to appoint the new auditors. There was a representative of Grant Thornton (the retiring auditors) at the meeting. I asked why Grant Thornton had resigned, hoping to get a comment from him, but Vic jumped in immediately and said he had put the audit function to tender because of the increasing costs and that the last 2 years audits had run very late and gone right down to the last second. I was hoping to corner the GT guy after the meeting and ask which came first, their resignation or the tender, but I did not get a chance.

I asked about the discrepancy between the 2 market ann's on the Ecopanels manufacturing site and delays on the trials. I got a long winded response from Vic about how they can't ignore when a better deal comes along, and one of the other shareholders at the meeting starting jumping in and responding directly to my questions in support of Vic's position.

By this point it was clear to me that I was flogging a dead horse, so rather that continue asking questions that would simply elicit similar responses, I simply said that the company's announcements were continuosly long on positive spin, yet nothing actually eventuated from them.

Obviously there were other issues discussed, but these were the highlights from my point of view, and the factors that confirmed my decision to exit from MSC. I find it telling that the announcement of the results of the AGM have not been released to the market yet.

I have no idea what will happen to this company in the future, it may well succeed in getting on with selling Kaolin, but I have absolutely no confidence left in the management of the company. I just wish I had woken up to it sooner.

I genuinely wish all holders good luck.

Kbear1 ....over and out!