RE:MI 61-101: Protection of Minority Security Holders Would suggest CGX shareholders read up on Multilateral CSA Staff Notice – 61-302, published by the Canadian Securities Administrators (“CSA”).
It would seem there is a regulatory body and framework within the CSA that oversees and monitors MI 61-101 transactions in real time. Key takeaways of the oversight body (as part of CSA Staff Notice - 61-302):
- CSA Staff is (in real time) reviews all material conflict of interest transactions for compliance with MI 61-101 and fairness to minority security holders.
- CSA Staff expects boards of directors to express a view as to the desirability of a transaction to minority security holders, not simply whether a transaction is in the interests of the issuer.
- Where a fairness opinion is provided, CSA Staff expects discussion of the structure of the financial advisor’s compensation arrangement and details regarding the methodology, information and analysis underlying the opinion.
As mentioned in the earlier post - MI 61-101 mitigates risks to minority security holders through four key mechanisms:
- the requirement to prepare and disclose a formal valuation from an independent valuator;
- approval of disinterested security holders (i.e. the “majority of the minority” vote);
- enhanced corporate governance through the use of a special committee of independent directors; and
- enhanced disclosure.
See link for more information: https://www.lexology.com/library/detail.aspx?g=070f960c-59c8-4f91-ac31-12d58a1adb9f
For CGX shareholders who are concerned about the upcoming equity raise with Frontera - the CSA apparently will take into account
any complaints received in respect of a transaction. The CSA contact information:
https://www.securities-administrators.ca/aboutcsa.aspx?id=99