Ximen denies dallying on dissident debentures
Ximen Mining Corp. says that there is no reason for the courts to overturn the results of its annual general meeting. There was no deliberate effort to prevent a dissident group from voting all of its shares, the company claims.
XIMEN MINING Corp., responding to a court case brought by a dissident group, contends that there is no reason to overturn the results of its annual general meeting. The dissidents did not put forward a dissident slate prior to the deadline, according to the company. Ximen also denies that it deliberately delayed converting debentures that the dissidents held.
The statements from Ximen come in response to a petition brought in the Supreme Court of British Columbia by a dissident group led by shareholder Robin Slaughter. The dissidents claimed that the company unfairly prevented them from voting all of their shares at the meeting. It did so by delaying the conversion of convertible debentures the group held until the day after the record date for the meeting, the petition claimed.
Ximen does not deny that events occurred in that sequence, but it says that this was not because of any improprieties on the company’s part. In a response filed on Oct. 23, 2017, the company says that the timing was in the hands of the dissident group. In the fall of 2016, long before the disputed meeting, Ximen had asked the group if they wanted to convert their debentures. The company was looking to clear some debt, the response states.
The dissident group did not provide notice until mid-December of their desire to convert, with the last notice coming on Dec. 21, 2016, Ximen says. With the Christmas and New Year holidays occurring around that date, the conversion arrangements did not go in until early January, according to Ximen. The dissident group was aware of the timing, and did not object, Ximen says. Accordingly, the company provided instructions to its transfer agent on Jan. 4, 2017 (the day after the meeting record date).
As Ximen sees things, the group simply has no reason to complain. “At the time of exercising their option to convert under the Debentures, the Meeting and associated record date had been publicly announced. The Petitioners were asked [whether] the shares could be issued in early January. Despite presumed knowledge of the record date, they did not object or request issuance before that date, nor did they object following the issuance,” the response states.
The meeting, as described by Ximen, was convened on Feb. 15, 2017, as scheduled. It was only then that the dissidents complained about their inability to vote. Ximen claims that this was the first the company knew about the group’s concerns. As a result, the company adjourned the meeting to March 10, 2017, to investigate. The investigation, as described by Ximen, determined that the only problem with the share issuance was one that had nothing to do with the issuance date. The shares had been incorrectly issued with a four-month hold, an error the company remedied.
Ximen further points out that even if the dissident group had been able to vote, the result would have been the same. This is because the only board candidates eligible for election at the AGM were the five management nominees. According to the response, the company received no notice of any other nominees on time.
In addition, Ximen says that it would be pointless for a court to overturn the results of its AGM. This is because the company’s next AGM is set for Dec. 6, 2017. The company further says that most of the dissident group’s members have sold their shares. As such, it would not be appropriate or practical to conduct a vote based on the company’s Jan. 4, 2017, shareholdings, Ximen contends.
Ximen’s version of events contrasts with that provided by the dissidents in their Sept. 20, 2017, petition. They said that they had attempted to convert $800,000 worth of debentures into 15.8 million shares, and that they gave notice of conversion with plenty of time to have it done prior to the record date. They claimed that the company deliberately delayed the issuance to prevent them from voting. They also pointed out that similar debentures issued to people supporting management were converted in time.
At the meeting, the dissident group put forward a slate of directors at the last minute. They also requested an adjournment to allow them time to put together a proxy. The matter went to a vote and was defeated narrowly. Had Mr. Slaughter and his associates been able to vote all of their shares, they would have been able to secure the adjournment, the petition claimed.
In addition to Mr. Slaughter, the petitioners are Jonathan Obertas, Jason Obertas, Graeme Wyman, Susan Gabe, Ian Glen, Donna Wyman, David Townsend and Robyn Wyman. They are represented by Vancouver lawyer David Church of Church & Company.
Vancouver lawyer Daniel Bennett of Norton Rose Fulbright Canada LLP represents Ximen. The stock closed Tuesday at four cents.
(XIM) Shares: 93,616,439