Dear .....
Thank you for your complaint sent to the Ontario Securities Commission (OSC) concerning High River Gold Mines Ltd. (High River).
I have forwarded your concerns to the Corporate Finance branch of the OSC for further review of any potential securities regulatory issues. If additional information is required, Corporate Finance staff may contact you, but you may hear nothing further. The OSC does not generally comment on the existence, status, or nature of an investigation or review. The purpose is to protect the integrity of investigations, to ensure the complaint process is not used to affect the market, and to provide fairness towards those who are the subject of investigations, but against whom proceedings may never be taken. If information is provided to the public about an enforcement proceeding, that information will usually be found in the "Enforcement Proceedings" section of the OSC web-site at
www.osc.gov.on.ca.
With respect to the rights of the minority shareholders, you should be aware that the management and the board of directors do have obligations to act in the best interests of the corporation and its stakeholders. These obligations however, arise principally from corporate statutory and common law, not securities law. Specific remedies may be available to shareholders for breaches of corporate law, and these provisions are generally enforced by the affected parties through the court system. Since OSC staff may not provide legal opinions or advice, if you wish to pursue these concerns, we suggest you consult with your own legal counsel with corporate and Ontario securities law expertise, for advice about remedies that may be available in legal proceedings.
The June 16, 2009 news release issued by High River announcing the private placement and offer to minority shareholders makes reference to Multilateral Instrument (MI) 61-101
Protection of Minority Security Holders in Special Transactions. This instrument provides additional protection to shareholders in the event of an acquisition proposal. The news release also notes that, prior to the special committee of independent directors of High River recommending acceptance of the Severstal offer, they obtained a formal valuation of High River prepared by Paradigm Capital Inc. If you have concerns about the information on which the evaluation is based, you may also wish to contact High River directly with your questions.
To view MI 61-101 on the OSC website at
www.osc.gov.on.ca, from the homepage:
- choose "Rules, Policies & Notices" under the heading "Policy & Regulation"
- select "Category 6 - "Take-Over Bids and Related Special Transactions"
- scroll down to "61-101- Protection of Minority Security Holders in Special Transactions and Related Companion Policy 61-101CP Protection of Minority Security Holders in Special Transactions".
We appreciate the time you have taken to express your concerns to us and we can assure you that OSC staff will consider them. However, we wish to note that any request for a specific regulatory decision to be made by the OSC should be made in an application submitted to the OSC in the proper form. To pursue such an application, we again suggest you seek guidance from your own legal counsel.