Jul 2013 Financial News

TCL Notice to Shareholders - Update on injunction

Jul 22, 2013

Notice to Shareolders

• TCL’s Annual Meeting scheduled for Friday 12th July, 2013 was stopped one hour before it commenced by an order of the High Court Judge, the Honorable Mr. Justice David Harris. The matter of Wilfred Holdings Limited and Others v. TCL was instituted by Mr. Wilfred Espinet on behalf of a group of eleven (11) shareholders holding 5.68% of TCL. After hours of submissions by attorneys representing TCL, and the group of shareholders, the Judge issued an injunction to stop the meeting.

• The injunction prevented the company from holding its Annual Meeting on 12th July, 2013, thereby denying the majority of shareholders the right to approve the audited financial statements for 2012, get an update from directors about the affairs of the company, and vote for critical resolutions such as the appointment of external auditors.

• This injunction poses serious questions about the rights of directors and shareholders. Accordingly, TCL filed an appeal on Monday 15th July, 2013, requesting an expedited hearing. The Court has fixed Monday 30th September, 2013 for the hearing of the Appeal.

• TCL in its Notice of Appeal stated that this purported action by the group of shareholders holding 5.68% of the company appears to have been orchestrated by Republic Bank Limited (RBL) in its capacity as a major secured lender to TCL. This is borne out by the statement of Wilfred Espinet in his affidavit of 11th July,
2013 where at paragraphs 11-15 he makes detailed reference to the central role played by Ian De Souza, the Managing Director of RBL in Barbados, in organising the whole Proposal.

• TCL has been servicing RBL’s debt and is fully compliant with all its loan obligations from the Debt Restructuring. TCL is also one of RBL’s oldest customers, having provided business to the bank for the past fifty years, and until
2011 was never in default of its obligations. Therefore, the TCL Board disapproves of the actions of RBL in this matter, which appear to be a manoeuvre to assume control of the TCL Board.

• The TCL Board believes that directors must balance the interests of these two critical stakeholders (shareholders and financiers) as their interests do not always coincide. For example, financiers do not want the company to resume dividend payments for many years while shareholders would be anxious for the
restart of dividend payments.

• TCL Shareholders will be kept up-to-date on all developments as to the holding of the 2013 Annual Meeting, which is required by Section 109 (a) of the Companies Act to be held by 12th January, 2014.

By Order of the Board
18th July, 2013


Source:
The Trinidad and Tobago Stock Exchange Limited
Monday July 22, 2013