News! 8th Press Release posted Sedar Sept 30 - Investigation Karnalyte Fails to Publicly Announce an Independent Investigation
Time to Stop the Oppression of Karnalyte Shareholders by
Gujarat State Fertilizers & Chemicals Limited and the Interim CEO
- Concerned Shareholders would like to know why Karnalyte has failed to publicly announce an independent investigation into the concerns raised by the Concerned Shareholders.
- Concerned Shareholders note that Karnalyte has decided to conduct an “internal review” of such concerns and investigate themselves.
- Concerned Shareholders believe it is time to stop GSFC’s, the GSFC Nominees’, and the Interim CEO’s oppression of Karnalyte shareholders by appointing a qualified, experienced and independent board of directors Saskatoon, SK,
September 30, 2020 — On July 7, 2020, a group of Karnalyte Resources Inc. (TSX: KRN) (“
Karnalyte” or the "
Company") shareholders (the “
Concerned Shareholders”), owning not less than 5% of the issued and outstanding shares of the Company, requisitioned (the “
Requisition”) the Board to call and hold a special meeting (the "
Special Meeting") of shareholders for the purpose of replacing the Board with a new independent board capable of pursuing opportunities in the Saskatchewan agricultural and fertilizer industry available to the Company that have the potential to create value for all shareholders.
The Concerned Shareholders requested that the Board be constituted with six (6) members, four (4) of whom are highly qualified nominees to be proposed by the Concerned Shareholders, and two (2) of whom will be nominees (the “
GSFC Nominees”) of Gujarat State Fertilizers & Chemicals Limited (“GSFC”), in accordance with GSFC’s contractual rights to appoint nominees to the Board.
On July 27 2020, Karnalyte called the Special Meeting to be held on December 15, 2020, almost five months from the date of the notice of meeting.
Failure to Publicly Announce an Independent Investigation
Peter Matson, one of the Concerned Shareholders and amongst the five largest shareholders of Karnalyte, noted that
“The Concerned Shareholders are extremely disappointed that Karnalyte has failed to publicly announce that it will conduct an independent investigation into the various concerns we have brought to the attention of the Board of Directors of Karnalyte.” Mr. Matson continued:
“Rather, management and the Board of Directors have decided to conduct an “internal review”, leaving us no choice but to believe that Karnalyte is concerned about the potential results of an independent investigation and that an internal review allows them to control the process and the results.” On July 22, 2020, the Concerned Shareholders wrote a letter to the Board of Directors of Karnalyte outlining a number of concerns regarding the conduct of the Interim CEO and the members of the Board of Directors of Karnalyte, and requested that Karnalyte undertake an independent investigation.
More than two months later, although the Company has indicated it will conduct an internal review, it has not publicly announced that it has initiated an independent investigation.
The Concerned Shareholders emphasized that in order to ensure a through, comprehensive and credible investigation, it must be conducted by a fully independent third party.
The Concerned Shareholders would like to know why, for the past 2 months, management and the Board have (based upon their public disclosure): - Decided to conduct an internal review, rather than an independent investigation?
- Not publicly announced the initiation of an independent investigation?
- Not given assurances to the shareholders and the capital markets that the concerns raised by the Concerned Shareholders will be independently investigated and not subject to a cursory internal review designed to whitewash the concerns of the Concerned Shareholders?
- Not committed to the shareholders and the capital markets to make public the results of the internal investigation?
- Not committed to the shareholders and the capital markets to take all appropriate steps, including resignations of management and members of the Board, if the results of the independent investigation reveal breaches of Karnalyte’s Code of Conduct? Contacts Peter Matson, on behalf of the Concerned Shareholders and the Nominees, welcomes the opportunity to engage with fellow shareholders. Mr. Matson can be reached at peter.matson.bell@gmail.com.
Additional Information The information contained in this press release does not and is not meant to constitute a solicitation of a proxy within the meaning of applicable securities laws. Although a record and meeting date for the Special Meeting was established by Karnalyte on July 27, 2020, shareholders are not being asked at this time to execute a proxy in favor of the Nominees. In connection with the Special Meeting, the Concerned Shareholders may file a dissident information circular in due course in compliance with applicable securities laws.
The Concerned Shareholders are not soliciting proxies in connection with the Special Meeting at this time. The Concerned Shareholders may engage the services of one or more agents and authorize other persons to assist in soliciting proxies on behalf of the Concerned Shareholders. Any proxies solicited by or on behalf of the Concerned Shareholders, or by any other agent, may be solicited pursuant to a dissident information circular or by way of public broadcast, including through press releases, speeches or publications and by any other manner permitted under Canadian corporate and securities laws. Any such proxies may be revoked by instrument in writing executed by a shareholder or by his or her attorney authorized in writing or, if the shareholder is a body corporate, by an officer or attorney thereof duly authorized or by any other manner permitted by law.
The registered address of Karnalyte is located at 2100 Livingston Place, 222 3 Ave SW Calgary, AB T2P 0B4. A copy of this press release may be obtained on the Company’s SEDAR profile at www.sedar.com.