BKF Capital Group, Inc. (BKFG) today released an open letter to shareholders of Qualstar Corporation (NASDAQ—QBAK) in advance of a Special Meeting of Shareholders on June 20, 2012 to remove and replace the Qualstar Board. In the letter, BKF accuses Qualstar of stalling on the production of accounting records, which BKF believes are relevant to shareholder assessment of the performance of the Board in advance of the Special Meeting, and questions whether the Qualstar Board is trying to hide information from shareholders. BKF also challenges the Board’s characterization of the new CEO that it selected, who has never served in a chief executive capacity, as a “turnaround specialist.”
The full text of the letter follows.
June 13, 2012
Dear Fellow Qualstar Shareholders:The Special Meeting of Shareholders to remove and replace the Board of Qualstar Corporation will be held on June 20, 2012. If you have not already done so, please promptly return your GOLD proxy card to vote FOR the proposals of BKF Capital Group, Inc. to remove and replace the Board , so that the BKF slate of nominees may begin to return value to shareholders. It would seem that the current Board members have already given shareholders sufficient reasons to remove them from office — the destruction of the Company’s share value, the decline in operating performance, the outsized compensation of the new CEO, the distortions and half-truths regarding the BKF slate. But this Board keeps adding more. Stalling on BKF’s Demand to Inspect Accounting Books and Records BKF exercised its right under California law to demand inspection of Qualstar's accounting books and records, including the following items:
- compensation and expense reimbursement to directors and officers;
- payments for aircraft owned by directors and officers;
- legal services performed by the law firm of one of the directors;
- investment advice paid for by the Company; and
- executive recruitment and compensation consultants.