Option Holders Clarification

I think there needs to be clarification of the case of the options.

There are people that seem to think that "option holders put in money to save the company three years ago". I think this is more of a moral argument and this is not going to stick in court. I was told in court it does not matter what your moral standing is, its what is your legal position.

The legal position that the option holders have is that under the Settlement and Release Deed which was signed on the 4th September 2014 it clearly states:



The above is a cut and paste of the Section 2 of the Settlement and Release Deed

Under their own signed agreement (signed by Abraham Li) by December 2014 there had to be a resolution on International Petroleum.

To date Nkwe will not release this Settlement and Release Deed because of "confidentiality" and then "we believe its not sensitive". The real reason is that there was $AU3.75million that was "missing".

I am told that Nkwe may not have wanted a scandal on their hands (understandably so) at the time and hence the creation of the Deed. The problem is that they never followed up on the terms and conditions that was set out and have allowed missing funds to still drag on till today. This settlement Deed expired over 15 months ago.

This Settlement Deed is VERY SENSITIVE because it tied in the resolution of International Petroleum (IPL). Just remember that IPL still holds 10% of Hoepakrantz farm. This farm 20.51Moz 4E metal. Geratau which is the flagship project has 21.79Moz 4E Metals.

First question is why IPL, which is a internal NKP matter just passed to "OKAP" to resolve. Since then the minorities group has evidence that IPL could have been resolved for like $AUD300k. Yet the whole issue is now in court where IPL is trying to sue Nkwe for $AUD45million.

The Company may have got away with not announcing the Settlement Deed on the day of its formation but upon its expiry they definitely had to announce it. The entire Nkwe board knew of this deadline but choose not to disclose or update the market. Its now over 15 months later and the only excuse the company has come up with is "oh we are now chasing Mr Landau for $2.5million" and "yeah we are talking to ASIC now". The company is only beginning to admit that Settlement Deed exist because it got shoved in their faces.

This deprived investors the decision to make an informed investment decision. I guess shareholders can also join in the legal case as well. I know this is where Slater and Gordon over the years has had many successful cases for damages against listed companies. It comes down to proving that the company with-held information that affected a investors judgement for a informed decision.

I know the option holders would rather work with the company to have the existing option series extended. The correct procedure is that a new series had to be issued upon the expiry of the existing options. If the existing Nkwe options are allowed to expire then its a legal fight. After all if the option holders lose everything then what is the point of holding back. The other thing is that the option holders are only looking at the 18 months that dated back to September 2014, they are NOT asking for a 3 year+.

Whether you believe in the options being given a new life, I know some will say "go convert", truth is that there is extremely strong evidence for a legal challenge.

If Nkwe had announced this entire Settlement and Release Deed back in December 2014/January 2015 and the matter is still outstanding, and the option holders still kept the options and are now facing expiry, sure I would agree that option-holders will NOT have a case. Truth is that they hid this document away until recently it surfaced and got shoved in their face.