It’s beenabout 4 months since the Boardroom bust up was made...

It’s beenabout 4 months since the Boardroom bust up was made public.

Seems to bea power or control issue with the Chairman identified as hostile by now departed Directors, and the appointment of his son as the new CEO. The ASX and probably ASIC are now makingenquiries.

Not sure how it will all play out but it’s obviously not good for perceptions of the company, staff morale, relationship with clients, share value and future. For simplicity I have called the Chairman ‘Pudu’, but in reality that is just the vehicle that houses the Chairman’s (Yingming Wang) declared shareholding.

There are afew possible scenarios:
- Getsrelisted without penalty or any adverse public findings. Has a new Board, new CEO and Puduin charge.

- TheASX and ASIC find that Pudu has breached his duties as Chairman and Director.Possible sanctions could be a fine and to ban him from acting as Chairman and aDirector, although he has already installed ‘patsy’ Directors and his son asCEO, so he’d probably continue to pull the strings behind the scenes.

- Aleft field outcome would be for ASIC to find that Pudu has more than 20%control of the company without declaring such a level of ownership. Hisdeclared ownership is 224.6m shares or 16.28%. He might be forced to eithermake an offer to all shareholders or divest part of his holding if found tohave control of more than 20% without declaration and then acted not in the best interest of all shareholders.

- Aswell as some adverse findings against Pudu, the company is forced to call ashareholder meeting to ratify the appointment of all the new Directors.If it doescome down to a proxy battle at some stage in the near future then it isinteresting to look at the share register.

At the AGMon 29/11/23 it was revealed that the old Directors were ousted with about 513.9mvotes against them as opposed to 257.8m in favour of them. The 513.9m wasdescribed as 63.1% of the shares that the company had received votes for. Sothere were about 814m shares voted either for or against the Directors.

However thecompany has about 1380m of shares in total, so about 566m shares did not voteeither way in the AGM. Many smaller shareholders were not aware of the ‘shenanigans’and did not bother to vote. So if Pudu has declared his hand with influenceover 513.9m shares, if the majority of those smaller shareholders who hold 566mshares, plus the ousted Directors who probably were a significant part of the 257.8mwho voted for them at the AGM, then Pudu would be defeated at a new meeting toratify events. Am I missing something there?

I’vewondered why the ousted Directors, who have significant individual investments,have gone so quietly. The longer it drags on then the greater the damage to shareholdervalue, including theirs. Perhaps they are waiting for the ASX to report andexpect that such a report will be critical of Pudu and provide them with theammunition and confidence to convince small shareholders to support the oustedDirectors in an expensive proxy battle.
We have no idea how long events will take toplay out. Speedy action from the ASX and ASIC would be appreciated but unlikely.Unfortunately none of the possible scenarios would stop the shares being soldoff significantly upon reinstatement to ASX trading.

While it is frustrating, calling a SpecialMeeting of shareholders without the public support of at least one of theousted Directors, without the outcome of the ASX enquiry, and without a forward plan is unlikely tochange anything.

We have no idea how long events will take toplay out. Speedy action from the ASX and ASIC would be appreciated but unlikely.Unfortunately none of the possible scenarios would stop the shares being soldoff significantly upon reinstatement to ASX trading.