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August 27, 2012, Mundoro Capital Inc. (the "Company") held an Annual General and Special Meeting of Shareholders (the "Meeting"). The results of the Meeting, as announced by the chairman, were extremely close, with the exception of Management's plan to amend the articles to entrench the advanced notice policy, which was soundly defeated by the shareholders.
Prior to, during and following the Meeting, the concerned shareholders voiced strong and repeated concerns about the independence of the chairman of the Meeting, the conduct of Management and certain directors, as well as ultimately, the outcome of the Meeting itself. These concerns were coupled with requests made to Management to review the proxies and other Meeting materials, which is a legal right of any shareholder. Such efforts, all in the direction of basic good governance and shareholder rights, were outright rejected by Management and the chairman,
After considerable delay, the concerned shareholders were finally provided with the Meeting materials (all be it with certain portions deleted) for review. This review established exactly what we were concerned about: certain proxies had been counted in favour of Management that should not have been and that, in our opinion, upon a proper tally, the concerned shareholders had been successful on all accounts.
Faced with a vote count based on the concerned shareholders' review that would have yielded minority representation on the Board of Directors of the Company, Management refused to accept the revised vote. Efforts to negotiate an alternate arrangement that could have been effected without a new shareholders meeting were delayed and ultimately rejected by Management and Mr. Hoey. Mr.
Allen Li, on behalf of the concerned shareholders made continuing efforts to meet with Mr. Hoey. Mr. Hoey accepted these overtures to meet, but dragged this process out until he finally told Mr. Li that Management was not about to reconsider the vote count as announced by the chairman.
Having exhausted all efforts of negotiation, this leaves the concerned shareholders with two options; to either go to court and have a judge overturn the outcome of the Meeting by agreeing that Mr. Hoey's inclusion of certain votes were invalid or alternatively, for the concerned shareholders to put an end to their campaign.