Resolution # 5 on Share consolation. To vote against itMonday, December 7, 2020
Open letter to Board of Directors of Sherritt and to its Shareholders
Dear Board of Directors
Sherritt International Corporation
Canada
Subject: Response to Voting on a Resolution to approve a proposed share consolidation
Resolution # 5
I am writing to you to strongly reject the above resolution which is being tabled at the Annual General meeting being held on December 15, 2020 and am asking you to withdraw the Resolution from being tabled.
Just tabling this Resolution tantamounts to betrayal of your fiduciary duty to the shareholders to protect their interest specially their financial interest. It also shows that you are only interested in protecting your own interest, your name and your reputation.
Let me elaborate.
Firstly, let me tell you that there is a very minuscule chance that post consolidation, the share price will rise to significantly benefit the current shareholders. You have ample examples of companies doing that and hardly any one of those companies provided any positive return to the pre-consolidation shareholders.
You know that and I am sure your consultants know that very well. So, I would say that this decision is unethical and lack any moral principles of responsibilities of your position. While the price of our basic commodity is going up and that the debt burden has been reduced significantly, let the share price at the current level of outstanding shares do their trick if you think you have finally made some good and strategically sound management decisions for the the company. Having 291 million shares for a company like Sherritt is not an unmanageable number of shares. So, do the right thing and drop the Resolution.
Secondly, the share consolidation only protects your reputation that you are not on the board of the penny stock company. So, it makes you feel good, important and marketable for other board positions in other company. If that is truly your motivation, then I ask you to not seek re-election. Again, do the right thing for the current shareholders and withdraw the Resolution.
I personally have been a continuous shareholder of this company since the 1990s and regret to say I have never seen the top management so incompetent and careless with spending the company’s money including the money you received from floating shares just last year.
Couple of examples would prove your incompetence.
1. Throwing good money after bad to the tune of $100 million in one oil hole while delaying accepting the evidence that this was a worthless proposition. How did the B of D allowed that to happen for over two years.
2. Not locking in the cobalt price when the world market prices went through the ceiling. Again, what was the expectation of the management, that it will keep going up indefinitely. Again, the B of D allowed this incompetence of management to ruin a great opportunity to benefit the company and, therefore it shareholders.
So, ladies and gentlemen of the board, please pull this Resolution from the table and for once do the right thing.
Your truly
Yousuf Ali
Long time Shareholder