[miningmx.com] — THE combined special and annual general meeting of Randgold & Exploration on March 9, was an event for connoisseurs, but it’s not clear that it was particularly fruitful for any of the warring parties.
Chairperson Dave Nurek was repeatedly subjected to hostile interjections – many from Trinity Asset Management’s Quinton George – and derisive laughter as he ploughed through the list of shareholders’ questions, repeatedly refusing to give information on the grounds that (a) it was an internal matter and confidential; (b) privileged; and/or (c) could prejudice the continuing process of mediation.
The dissidents were also upset that Nurek wouldn’t allow them to submit supplementary questions, saying these must be submitted in writing by 17:00 and would be responded to as soon as possible, promising that they would also be put up on R&E’s website.
To the dissidents, this made the meeting “farcical” – a process in which they played their full part – but Nurek insisted that this was proper procedure.
Still, a couple of points were established. Firstly, none of the directors consider themselves Investec “appointees”, and we were assured that they will all act in the best interests of the company.
Secondly, Peter Gray still implicitly sees no conflict in being CEO of both R&E and JCI. And thirdly, any settlement between R&E and JCI will not preclude the pursuit of legal action against third parties which could be considerable.
When we moved on to the specially constituted AGM (the registrar of companies had given permission for this to be held for the sole purpose of confirming the board of directors, as there are still no audited results to consider) Tom Dale and Johann Blersch, co-opted to the board at the instigation of Trinity last August, were promptly voted off.
The rest were re-elected, mostly by about 55% of votes cast. This was hardly a resounding vote of confidence, although Gray won 72% and new finance director Marais Steyn 97%, which led to ironic calls for him to be made chairperson.
“There go the only properly independent directors,” grumbled one shareholder.
Gap as wide as ever
Earlier, Nurek had refused to allow Dale and Blersch, who knew they were due for the axe, to read into the record a statement deploring the corporate governance of R&E, the conflicts of interest on the board, and their own exclusion from decision-making.
The furthest Nurek to go was to agree that his refusal would itself go into the record.
The meeting confirmed that the gap between the two sides is as wide as ever, though there is agreement in principle by most parties that a merger of R&E and JCI is the best solution to the dispute.
But not by everyone: investor Monty Koppel made it clear after the meeting that he prefers to be a significant shareholder in JCI rather than a small shareholder in a merged operation, though he might not be averse to a bid from a third party for the whole lot.
And there is every indication that the dissidents will continue to attack the Investec loan agreement, independently of their attitude to any merger proposal. Trinity, R&E and JCI may have settled their claims and counterclaims last September, but that was just a ceasefire, not a peace treaty.
Encouraging news
The most encouraging news is that after an interregnum of six months since the resignation of Chris Lamprecht as financial director of both companies, his successors Steyn and JCI’s Les Maxwell, both appointed only in December, seem to have a good relationship and have made excellent progress in debating merger terms.
Moreover, they’re carrying the mediators with them, so any proposal they make is likely to be readily endorsed by them.
But it will have to be approved by shareholders of both companies. That could prove tricky, especially if the status of shares which may have been improperly issued has been settled by then.
As it is, Nurek is adamant that any shares included on the register may be voted unless and until any improprieties in their issue have been demonstrated.
The dissidents also insist that unless various forensic reports are released in full, they won’t be in a position to assess any possible settlement or merger proposal, so more arguments can be expected on that issue.
While not disagreeing with me that JCI is probably bust and can expect little more than a approximation of its legal costs and nuisance value, Maxwell also makes the point that if JCI is liquidated, its mineral rights could be forfeit.
The multi-billion rand value put on these in the Kebble era may have been one of the many fictions of that time, but it’s obviously desirable to preserve these within the broader group.
And he confirms that the many possible actions against third parties will continue to be pursued after any merger. Indeed, he and Steyn will then be able to devote much more attention to them.
This is a multi-level story. A merger proposal could well be formulated within weeks, but that won’t end the row. There’s not even a concentration of the opposition: Koppel and the Trinity/George interests are acting independently.
And while some requests for information may genuinely be aimed at enlightenment, there’s another barely hidden agenda: to attack not just the Investec loan agreement but the bank’s entire role in the JCI “rescue” and how independent the R&E board really is.
