TORONTO, Dec. 12, 2013 /CNW/ - Equity Financial Holdings Inc. (TSX: EQI)
("Equity" or the "Corporation") responded to statements made by
Smoothwater Capital Corporation ("Smoothwater") in a recent press
release. Smoothwater is acting jointly with Nick Kyprianou and Darryl
Ivan (the "Terminated Employees"), ex-employees of the Corporation's
subsidiary, Equity Financial Trust Company ("Equity Trust"). The
Terminated Employees were fired in October 2013 upon a unanimous
decision of Equity's board of directors (the "Board"). In addition to
demanding their old jobs back in the place of current senior
management, the Terminated Employees and Smoothwater are demanding to
replace a majority of the Board.
Smoothwater has proposed an advisory resolution and amendments to the
Corporation's by-laws to restrict the ability of the board of directors
elected at the upcoming Annual and Special Meeting of Shareholders, and
any future board, to fulfill its duties and set the strategy for the
Corporation, pursue strategic transactions, or access financing.
Smoothwater has itself acknowledged to the Corporation that these
proposals do not comply with the procedural requirements of the Canada
Business Corporations Act. In any event, Smoothwater's proposals are
nothing more than a distraction since they would have no effect until
after the shareholders meeting.
The Board is undertaking a process to evaluate all realistic
alternatives for enhancing shareholder value. Notwithstanding
Smoothwater's allegations to the contrary, there has been no attempt to
entrench the Board or management. Any value maximization alternatives
put forward by the Board will require some form of shareholder approval
or acceptance, or otherwise comply fully with all applicable
shareholder democracy requirements. Smoothwater's efforts to distract
the process before the Board has completed its work and made its
recommendations are misguided and destructive of shareholder value.
The Board will continue to engage with shareholders and consider their
views. In connection with the upcoming Annual and Special Meeting of
Shareholders, the Corporation will provide a management information
circular that will be mailed to shareholders and posted on the
Corporation's website and SEDAR.
About Equity Financial Holdings Inc.
Equity is a Canadian financial services company serving the alternative
retail mortgage market through its federally regulated and wholly-owned
subsidiary, Equity Financial Trust Company. Learn more at www.equityfinancialholdings.com.
Forward Looking Information
Certain portions of this press release as well as other public
statements by the Corporation contain "forward-looking information"
within the meaning of applicable Canadian securities legislation, which
is also referred to as "forward-looking statements", which may not be
based on historical fact. Wherever possible, words such as "will",
"plans," "expects," "targets," "continue", "estimates," "scheduled,"
"anticipates," "believes," "intends," "may," and similar expressions or
statements that certain actions, events or results "may," "could,"
"would," "might" or "will" be taken, occur or be achieved, have been
used to identify forward-looking information. Such forward-looking
statements include, without limitation, the Corporation's expectations
in respect of earnings, fee income, expense levels, general economic,
political and market factors in North America and internationally,
interest rates, global equity and capital markets, activities, the
Corporation's expected need for equity on debt financing, business
competition, technological change, changes in government regulations,
unexpected judicial or regulatory proceedings, catastrophic events, and
the Corporation's ability to complete strategic transactions and
integrate acquisitions and other factors.
All material assumptions used in making forward-looking statements are
based on management's knowledge of current business conditions and
expectations of future business conditions and trends, including their
knowledge of the current credit, interest rate and liquidity conditions
affecting the Corporation and the Canadian economy. Certain material
factors or assumptions are applied by the Corporation in making
forward-looking statements, including without limitation, factors and
assumptions regarding interest rates, availability of key personnel,
the effect of competition on the Corporation's business, government
regulation of its business, computer failure or security breaches,
future capital requirements, its ability to fund its mortgage business,
the value of mortgage originations, the competitive nature of the
alternative mortgage market, the expected margin between the interest
earned on its mortgage portfolio and the interest to be paid on its
deposits, the relative continued health of real estate markets,
acceptance of its products in the marketplace, as well as its operating
cost structure and the current tax regime.
Forward-looking statements reflect the Corporation's current views with
respect to future events and are subject to a number of risks and
uncertainties. Actual results may differ materially from results
contemplated by the forward-looking statements. Readers should not
place undue reliance on such forward-looking statements, as they
reflect the Corporation's current views with respect to future events
and are subject to risks and uncertainties and are necessarily based
upon a number of estimates and assumptions that, while considered
reasonable by the Corporation, are inherently subject to significant
uncertainties and contingencies. Many factors could cause the
Corporation's actual results, performance or achievements to be
materially different from any future results, performance, or
achievements that may be expressed or implied by such forward-looking
statements, including a significant downturn in capital markets or the
economy as a whole, significant increases in the cost of complying with
applicable regulatory requirements, civil unrest, economic recession,
pandemics, war and acts of terrorism which may adversely impact the
North American and global economic and financial markets, inability to
raise funds through public or private financing significant changes in
interest rates, failure by Equity Financial Trust Company ("EFT") to
meet ongoing regulatory requirements, the failure of borrowers or
counterparties to honour their financial or contractual obligations to
EFT, failure by EFT to adequately monitor and/or adjust its mortgage
portfolio management practices for changing circumstances, failure by
the Corporation to attract and to retain the necessary employees to
meet its needs, failure by EFT to adequately monitor the services
provided by third party service providers or to establish alternative
arrangements if required, failure by EFT to secure sufficient deposits
from securities dealers or a sufficient level of mortgage origination
from its mortgage broker network, a failure of the computer systems of
the Corporation or one or more of its service providers or the risks
detailed from time-to-time in the Corporation's quarterly filings,
annual information forms, annual reports and annual filings with
securities regulators. The preceding list is not exhaustive of possible
factors. The Corporation disclaims any intent or obligation to update
or revise publicly any forward-looking statements whether as a result
of new information, estimates, future events or results, or otherwise,
unless required to do so by applicable laws.
SOURCE: Equity Financial Holdings Inc.
For further information:
Equity Financial Holdings Inc.
Paul G. Smith
President & CEO
(416) 361-0152 Ext 270
Bayfield Strategy, Inc.