Clifton Star Res Inc CFMSF

Showdown at the Not O.K. Corral

[CSIGroup]

Showdown at the Not O.K. Corral

 

A Clifton Star Resources (CFO.V) shareholder voting deadline looms on the horizon. It is Monday, December 15 at 5pm eastern time. Shareholders are reporting that they are being badgered by phone calls, in many cases repeated phone calls, from a company named Kingsdale Shareholder Services Inc. Clifton Star management is paying Kingsdale $100,000 of shareholders' money to get shareholders to vote back in the current board of directors. Once again, the board of directors and CEO are using company money to serve themselves, not the shareholders. They believe they have to buy votes. Shareholders forever ignored by current Clifton Star management are suddenly getting a lot of personal attention -- and not by management but by some company they are paying handsomely.

It is ludicrous for the present board of directors to say that they have been working hard on enhancing shareholder value when shareholder value has dropped precipitously to almost zero. Similarly, it is ridiculous for them to say to vote for the present board of directors in order to "protect your investment". Everyone knows that nearly the entire value of that investment has dropped to about 7 cents a share during their reign.

 

The board of directors say that shareholders have a responsible board making responsible decisions. However, the present board is irresponsible in many ways. Among them is approving the CEO's outrageous total compensation of $371,422 per year, and not maintaining a good relationship with the Duparque property owners. They also voted $158,000 for themselves. They are not spending the $100,000 to solicit proxies on behalf of shareholders. They are doing it to protect their cushy lifestyles.

Current management says that exercising the Duparque option would have been a very bad deal for Clifton Star. This is a straw man argument. Nobody believed the Duparque option in its original form was still viable and that's why they were trying to renegotiate it. The fact that they tried (unsuccessfully) to renegotiate the option until nearly the last day before expiration means that they believed the option could have been a good deal for Clifton Star under the new terms they were proposing.

The proxy solicitation company has been instructed to say that all the company's problems are due to the previous CEO Harry Miller. The fact is that this same board of directors were there the whole time, vetting the previous CEO's decisions (and the current CEO's decisions). A good CEO delegates responsibilities to the other members of the team. This team has had years to supposedly do their jobs. It has become typical of each administration to blame the previous administration for their problems. When are they going to take any responsibility for their own failures?

The proxy solicitation company makes it sound as if Harry Miller is the only person who wants to install a new board of directors. The fact is, Miller reports that other people representing some 30% of Clifton Star shares have approached him and pleaded with him to do something to turn the company around. They are the disgruntled shareholders who feel they have not been listened to by present management. They are a groundswell of shareholder support for a regime change, whose votes cannot be bought.