Fabled Silver Gold Corp T.FCO

Inexcusable semantic fraud

[dgh7]

This is an open letter to the FMI BOD.

Shareholders are security holders."

Yes and no.

I have traditionally defined FMI shareholders as entities which hold a share of the Capital Stock of the publicly-traded company Formation Metals Inc. On a balance sheet, this always appears quite separate from a company's indebtedness from both short-term loans (liabilities) and long-term debt.

However, in Ontario the Ontario Securities Commission definition of "securities" include common shares, preferred shares, warrants and options. If you look in SEDI, you will see that insiders do not have to disclose any ownership of "securities" which take the form of either short-term commercial paper or long-term loans. I assume that SEDI treats debentures as commercial paper and not as Capital Stock.

The verdict: FCI is guilty of inexcusable semantic fraud. Perhaps not criminal fraud but certainly of corporate governance fraud. And why? To what end? What is the point of being a former teacher if one goes ahead and shoots oneself in the foot.

There ought to be no obligation on the part of a shareholder to contact FMI to obtain information/clarification on the purpose of the meeting and who is and is not a Security Holder. That obligation rest squarely with the CEO of FMI. In this instance, she has failed utterly in her duty regarding transparent corporate governance. I remind the reader that I have (and remain) a supporter of our CEO over the past six years. That does not alter the fact that the lack of transparency and clarity surrounding the upcoming meeting is totally unacceptable.

In short, what we have here is not a failure to communicate. It is far worse. It is,  in my humble opinion, tantamount to inexcusable semantic fraud. It is something which should never have happen with a former school teacher at the helm. It ought to be addressed immediately by the FMI Board of Directors. It is unacceptable corporate governance which is totally inconsistent a prior record of excellent corporate governance from this company.

If a rose is a rose, is a rose; by any other name, semantic fraud is semantic fraud, is semantic fraud. Shame on FMI!

Yours truly,

Douglas G. Harland.
(a loyal six-year shareholder)