Decisions in relation to the commencement, or otherwise, of...

Decisions in relation to the commencement, or otherwise, of legal proceedings by an ASX listed company are the prerogative of the Board of Directors and will be based on advice from legal counsel in respect of the likelihood of success of any such proposed action. The Board would be expected to make such decisions based an a full understanding of all the information that they have to hand in respect of the matter, as well as the legal advice that was likely sought. At the end of the day, management and the Board of Directors are appointed to manage a company on an operational level and are responsible for the day to day operations of the company. There is a legal requirement that each of the Directors is fully aware of what is happening with the company at all times and this falls under their duties as a Director. Shareholders outside of the management team and Board are never going to have the same level of operational knowledge of the company that the Board of Directors does. To expect that a shareholder, no matter how significant their holding may or may not be, to explain the actions of the Board of Directors and management is IMO inappropriate as only the Board and management are privy to all the facts of the matter that actually underpinned their decision. Such decisions will be minuted. Questions in respect of why the matter was not ligated should reasonably be directed to the Board. I would expect that any response from the Board would be dependent on protecting the legal interests of the company (and shareholders by default).

From memory, Nagroom were experiencing financial difficulties due to the downturn in the mining sector, IMO this could well have been a factor in the decision not to litigate. It would not be the first time that a Defendant in a matter has declared bankruptcy upon commencement of an action. this is a no win situation for all involved. Whilst the decision of the Board appears to be that the matter will not be litigated at this point in time, the time limits imposed by the Statute of Limitations has by no means passed and it is feasible that the company may seek to litigate for damages at a later date if the Board decides that this is in the best interests if the company and the shareholders.

All IMO