Post by
walker77 on Oct 15, 2013 6:18pm
MATERIAL INFORMATION
It has now been 13 days since investors have been made aware on this blog of the mezzanine loan that Empower has received from an unknown 3rd party as arranged by Performance Capitol. The date of the loan remains unknown. There has been more than enough time for Leung to provide the legally required update.
I have been advised by a knowledgable and reliable person that this type of information falls squarely within the definition of material information.
As such, the CEO must by law announce in a timely fashion the loan with all relevant facts made clear so that the investors of Empower have the opportunity to assess the changing situation. This is not an option. It is a well defined legal requirement.
This is not the first time Leung has neglected to inform investors of material information. In fact it is not even the 2nd or 3rd or 4th time he has failed in this regard. It is a very troubling pattern when the CEO withholds material information from investors.
There are quite a number of examples to cite but I will leave that for another day.
The investors of this company have a right to know the terms and conditions of the mezzanine loan. How much money was borrowed? Interest rate? Are there shares involved? What is the loan to be used for?
A mezzanine loan is not a bad thing, although the terms are typically very onerous. They are actually quite common for small companies that wish to expand and I have no issue with the loan under the desparate circumstances Leung has put the company in.
However, we have the right to know so that we can decide whether to buy, sell or hold. Thats the law.