Shareholders are urged to seize this opportunity for change at Ellipsiz by voting FOR the removal of Elliott Jacobson, Mark Korol and Grant Sawiak and FOR the election of Kean Li Wong, Long Trinh and Ian Mallmann
TORONTO, June 15, 2017 /CNW/ - Mr. Tat Lee (Michael) Koh, the single largest shareholder and a director of Ellipsiz Communications Ltd. ("ECT" or the "Company") (TSXV: ECT), wishes to respond to the management information circular issued by the Company on June 12, 2017 in connection with the special meeting of shareholders (the "Meeting") to be held on July 7, 2017 as ordered by the Divisional Court of Ontario.
The entrenched directors that Mr. Koh is seeking to remove at the Meeting (namely Elliott Jacobson, Mark Korol and Grant Sawiak, the "Entrenched Directors") are focused on a single goal – to remain on the board of directors of ECT (the "Board") at all costs by using whatever tactics they can think of, including costly and unnecessary court hearings, unfounded allegations and repeated threats. One thing is certain, Mr. Grant Sawiak, who has led the efforts of the Entrenched Directors, has made good on his threat to ensure that if Mr. Koh sought to remove the Entrenched Directors, Mr. Koh would (i) have to be "committed to following [the] legal process to the very end", (ii) "lose a lot of money" and (iii) have to be prepared to endure a process by which the Entrenched Directors would seek to make it "painfully embarrassing for him and his reputation", all at the expense of the Company and its shareholders.
In their circular, the Entrenched Directors have made various claims against Mr. Koh that are unfounded and have no purpose other than an attempt to embarrass Mr. Koh. Their statements infer wrongdoing on Mr. Koh's part without any evidence. For example, the Entrenched Directors have apparently drawn their own conclusions regarding an investigation even though the matter is still being litigated in Singapore.
The Entrenched Directors also seek to pressure shareholders by stating that if Mr. Koh is successful in reconstituting the Board, then Mr. Chong Gin (Sam) Tan (the current CEO of the Company) will resign which will cause "great harm" to the Company. Mr. Tan was appointed CEO in January 2017, but the Company's Q1 2017 performance was practically unchanged from its Q1 2016 results. Mr. Koh is confident that the reconstituted Board will be able to find a suitable replacement who will act in the best interests of all shareholders.
What is clear is that the Entrenched Directors have little regard for the law and have repeatedly acted in a clandestine manner. While they accuse Mr. Koh of improperly exercising his fiduciary duty, it is the conduct of the Entrenched Directors themselves that is at best highly questionable. For example, shareholders need only consider a recent set of events regarding the Entrenched Directors' attempt to conclude a significant transaction (the "Transaction") that formed the basis of Mr. Koh's decision to remove the Entrenched Directors.
Even after being ordered by the court to hold the Meeting, the Entrenched Directors stalled and instead focused their efforts on signing and concluding the Transaction whereby the Company would purchase all the outstanding shares of another company for over US$3.5 million. The Transaction was surreptitiously negotiated, signed and a deposit was made before it was even presented to the Board for consideration and approval. When questioned, the Company claimed that either party to the Transaction may terminate it in the event that Mr. Koh is successful in reconstituting the Board at the Meeting. However, no such provision exists in the purchase agreement and only the vendor is provided with the right to terminate upon the successful reconstitution of the Board. Under the circumstances, Mr. Koh had no choice but to seek a temporary injunction from the Ontario Superior Court of Justice – Commercial List to prevent the Transaction from forging ahead. In granting the injunction, the Commercial List judge in referring to the timing of the entering into of the Transaction noted that "the waft from timing would appear to be undermining of shareholder democracy and the Div. Court's decision." There can be no doubt that the Entrenched Directors and Mr. Tan have been keenly focused on undermining the will of shareholders.
Pursuant to the orders of the Divisional Court and the Commercial List, the Company has been compelled to hold the Meeting on July 7, 2017 at 4:00 p.m. (Toronto time) with a record date of October 24, 2016. The location of the Meeting will be 22 Adelaide Street West, Suite 3600, Toronto, Ontario. At the Meeting, shareholders will have the opportunity to reconstitute the Board by removing the Entrenched Directors, being Elliott Jacobson, Grant Sawiak and Mark Korol, and replacing them with the following independent nominees: Kean Li Wong, Long Trinh and Ian Mallmann. For additional information regarding these nominees, please see Mr. Koh's information circular dated October 25, 2016, which is available on ECT's company profile on SEDAR at http://www.sedar.com. Given the Entrenched Directors' blatant disregard for the law and the interests of shareholders in favour of their own self-interest, it is vital for shareholders to vote for the reconstitution of the Board and the enhancement of shareholder value.
Shareholders are urged to vote FOR the removal of all of the current directors of the Company except for Tat Lee (Michael) Koh and Chong Gin (Sam) Tan and FOR the election of Kean Li Wong, Long Trinh and Ian Mallmann as directors of the Company by completing and returning the WHITE proxy accompanying the Company's management information circular or by voting online, by fax or by phone. PROXIES MUST BE RECEIVED NO LATER THAN 9:30 A.M. (TORONTO TIME) ON THURSDAY, JULY 6, 2017 OR, IF THE MEETING IS ADJOURNED OR POSTPONED, 9:30 A.M. (TORONTO TIME) ON THE LAST BUSINESS DAY PRECEDING THE DAY OF THE ADJOURNED OR POSTPONED MEETING.
INFORMATION IN SUPPORT OF PUBLIC BROADCAST SOLICITATION
Mr. Koh is relying on the exemption under section 9.2(4) of National Instrument 51‐102 ‐ Continuous Disclosure Obligations to make this public broadcast solicitation. The following information is provided in accordance with corporate and securities laws applicable to public broadcast solicitations.
This solicitation is being made by Mr. Koh, and not by or on behalf of the management of ECT. Based upon publicly available information, the Company's registered office is at 77 King Street West, Suite 3000, P.O. Box 95, Toronto-Dominion Centre, North Tower, Toronto, Ontario, Canada, M5K 1G8 and the Company's head office is at 40 University Avenue, Suite 606, Toronto, Ontario, Canada, M5J 1T1. Mr. Koh has filed an information circular dated October 25, 2016 containing the information required by Form 51‐102F5 – Information Circular in respect of the independent nominees, which is available on ECT's company profile on SEDAR at http://www.sedar.com. Proxies for the Meeting may be solicited by mail, telephone, facsimile, email or other electronic means as well as by newspaper or other media advertising and in person by Mr. Koh. In addition, Mr. Koh may solicit proxies in reliance upon the public broadcast exemption to the solicitation requirements under applicable Canadian corporate and securities laws, conveyed by way of public broadcast, including press release, speech or publication, and by any other manner permitted under applicable Canadian laws. All costs incurred for the solicitation will be borne by Mr. Koh.
A registered shareholder of the Company who has given a proxy may, in accordance with Section 110(4) of the Business Corporations Act (Ontario), also revoke the proxy at any time prior to use (i) by depositing an instrument in writing revoking the proxy, executed by such registered shareholder or by his, her or its attorney authorized in writing, either: * at the registered office of the Company at any time up to and including the last business day preceding the day of the Meeting or any adjournment thereof, or (y) with the chair of the Meeting on the day of the Meeting or any adjournment thereof; or (ii) in any other manner permitted by law. A non‐registered shareholder of the Company may revoke a form of proxy or voting instruction form given to an intermediary at any time by written notice to the intermediary in accordance with the instructions given to the non-registered shareholder by its intermediary. Non-registered shareholders should contact their broker for assistance in ensuring that forms of proxies or voting instructions previously given to an intermediary are properly revoked. It should be noted that revocation of proxies or voting instructions by a non‐registered shareholder can take several days or even longer to complete and, accordingly, any such revocation should be completed well in advance of the deadline prescribed in the form of proxy or voting instruction form to ensure it is given effect in respect of the Meeting.
SOURCE Michael Koh
For further information: CONTACT INFORMATION: Michael Koh, [email protected], 8618600022263