Independent InvestigationWhat makes this interesting pp is that since the CSG filed this action, another director directly related to GSFC was brought on to the board after Varma’s departure.
With the corporations claims that a leading law firm found no breaches had occurred, is the investigation results based on the contents of the July 22, 2020 written demand submission made by the CSG, or the sworn affidavits by members of the CSG as there is certainly a lot of information to process in the affidavits.
The corporation states:
“The investigation process was identical to the process used in January 2019, when a similar review was conducted of allegations raised by a shareholder against the Dissidents, then directors of Karnalyte.”
https://www.newswire.ca/news-releases/karnalyte-resources-inc-announces-results-of-investigation-852560129.html From FDW affidavit:
“43. In November 2018, information came to my attention that in my opinion, as CEO of Karnalyte, warranted an independent investigation. I hired MLT Aikins to undertake the investigation, and with the results of the investigation in hand, I requested the resignation of the three (3) independent directors.” From CSG Originating Application
Independent Investigation 198. On July 22, 2020, in a letter to the KRN Board, the Concerned Shareholders demanded an independent investigation into the matters raised by the Concerned Shareholders. Karnalyte hired ...................... from its law firm MLT Aikins to undertake an investigation. The Concerned Shareholders provided a written submission to MLT Aikins, outlining their concerns in detail. “199. The Concerned Shareholders were interviewed for between two (2) and five (5) hours by MLT Aikins as part of the investigation. Rowan was interviewed by MLT Aikins. The Concerned Shareholders are not aware of who else may have been interviewed as part of the investigation.” “200. On October 26, 2020, Karnalyte issued a press release (the “October Press Release”) stating that MLT Aikins had conducted an investigation and found that there was not one (1) single breach by the KRN Board, the GSFC Nominees, or management, of any provision of the KRN Code of Conduct, Securities Laws, TSX Rules, or the Subscription Agreement, and that there were no conflicts of interest or instances of self-dealing.” From TR affidavit:
229. I was interviewed by ............. for almost two (2) hours. I found it very odd that in my interview that he only asked questions on matters that did not seem relevant to the concerns set out in the Submission.
230. I verily believe that the only reason ........... was asking me such questions was because ............... had provided ........... with a narrative they wanted him to prove, rather than investigating the concerns of the Concerned Shareholders. I verily believe there is no other explanation for ............. not asking questions on the matters raised in the Submission, unless he had been instructed by ............ and .............. to do otherwise.
231. I verily believe the investigation, and its conclusion, have no credibility whatsoever, and are a complete whitewash, given my involvement with KRN as a director and the Interim CEO, and my understanding of the events that occurred during 2019 and 2020.
Based on the CSG members statements made within sworn affidavits, could this be a situation where the courts may be better suited to review the evidence from all parties involved and determine an unbiased decision?