TORONTO, May 9, 2013 /CNW/ - Today the group of concerned shareholders of Bioniche Life Sciences Inc. ("Bioniche") led by William (Bill) M. Wells, former Chief Executive Officer of Biovail Corporation, and Greg Gubitz, former General Counsel and Senior Vice President of Corporate Development at Biovail Corporation, announced their profound disappointment that the board of directors of Bioniche has resorted to employing unacceptable stalling tactics in rejecting Mr. Wells' requisition to hold a special meeting of the shareholders to replace the board.
This rejection of Mr. Wells' requisition is consistent with the Bioniche board's continued entrenchment of themselves and utter disregard for the company's shareholders, the owners of the company.
The Concerned Shareholders are very disappointed that the members of the Bioniche board would take this step to seek to entrench themselves in the face of their dismal track record and in complete disregard of their fiduciary obligations. The Concerned Shareholders expect that their fellow shareholders are similarly disappointed and frustrated with the board's actions.
In response to the technical legal points raised in Bioniche's recent press release rejecting Mr. Wells' requisition, the Concerned Shareholders note the following:
- A Valid and Proper Requisition. The Canada Business Corporations Act specifically states: "the holders of not less than 5% of the issued shares of a corporation…may requisition the directors to call a meeting of shareholders for the purposes stated in the requisition". There is no statutory requirement that a registered shareholder submit the requisition. The requisition submitted by Mr. Wells included a sworn affidavit from him attesting to his beneficial ownership of 5,853,322 Bioniche shares. Further, Mr. Wells has, through the Concerned Shareholders, issued three press releases publicly attesting to his share ownership. Mr. Wells is clearly a significant shareholder.
- Purpose of the Meeting. Mr. Wells' requisition very clearly states that the purpose of the meeting is to replace Bioniche's board. There is no statutory requirement for a requisitioning shareholder to list its nominees at the time of making the requisition; nor is it customary practice to do so. The Concerned Shareholders will, in accordance with applicable law, publish full details of their board nominees as soon as practicable following the board's announcement of the special meeting of shareholders.
The Concerned Shareholders strongly encourage the Bioniche board to act appropriately and in accordance with its legal responsibilities. To continue to waste the company's scarce resources on legal and advisory fees to entrench itself is merely further evidence of a board acting in its own self-interest and contrary to its fiduciary duties to the company and its shareholders.
The Concerned Shareholders expect the Bioniche board to abide by the legal requirements and call the special shareholders meeting by May 16th, the deadline under applicable law, by which the board must call a meeting in response to Mr. Wells' April 25th requisition. If the board fails to do so, the Concerned Shareholders will take all necessary actions to defend their rights as Bioniche shareholders.
The Concerned Shareholders decry the board's announcement that it has called Bioniche's annual meeting of shareholders for November 5, 2013. Calling an annual meeting more than six months before the proposed meeting date is nothing more than a transparent attempt to prevent shareholders from exercising their statutory right to a timely meeting to consider replacement of the current board members. It is artificial and a sham. The Bioniche board is simply trying to frustrate shareholder democracy and deny shareholders their statutory rights.
The Concerned Shareholders will not wait until November to have their voices heard. Immediate action must be taken to reverse Bioniche's decline. Bioniche's Q3 financial results released yesterday clearly show a rapidly deteriorating situation. The company's revenue in the quarter declined by 12% compared to the same period last year and the average monthly cash burn rate has increased to $1.4 million per month. The company is hemorrhaging and rapidly running out of resources. Further delay is extremely prejudicial to shareholder value. The current board has had years to turn the situation around and has failed to do so. It is time to let the shareholders have their say - before it is too late.
Once again a chart demonstrating the abysmal performance of management and the board is attached. It demonstrates why those managing Bioniche will do anything to avoid facing the company's shareholders.
Bioniche's board and management have lost all credibility. These latest stalling and entrenchment tactics are just one more desperate attempt to save their positions without regard to the best interests of the company and its shareholders.
It is time for new direction and new leadership.
SOURCE: William (Bill) M. Wells and Greg Gubitz
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