TORONTO , Jan. 8, 2015 /CNW/ - Today, funds controlled by Meson Capital Partners LLC ("Meson Capital") and Nightscape Capital (UK) LLP ("Nightscape Capital", collectively, the "Concerned Shareholders") that hold shares representing approximately 9% of the issued and outstanding shares of Aberdeen International Inc. (AAB.TO) ("Aberdeen" or the "Company") announced that they have filed their information circular ("Circular") for the special meeting of shareholders requisitioned by the Concerned Shareholders scheduled to take place on February 3, 2015 (the "Requisitioned Meeting").
The Concerned Shareholders cite Aberdeen's underperformance and egregious governance deficiencies as primary reasons for board change and have nominated Ken Daraie , Andrew Green , Ryan J. Morris , Michael Kahan , Joseph Lee Grant Matheson , Akbar Mohamed and Mark Piotrowski , highly qualified and experienced individuals, to be elected to the Board at the Requisitioned Meeting on February 3, 2015 .
Attention Aberdeen Shareholders:
Regardless of how many Aberdeen Shares you own, it is imperative you vote your GOLD proxy to put an end to the current Board's track record of inappropriate related party dealings, culture of egregious insider self-enrichment, entrenchment and inadequate board oversight while shareholder value is destroyed and transferred to insiders connected to Stan Bharti and Forbes & Manhattan .
The Concerned Shareholders' Plan to "Free Aberdeen" and Maximize value for ALL Shareholders
As is described in the Circular, the Concerned Shareholders have established a plan to extricate Aberdeen from the destructive influence of Stan Bharti and Forbes & Manhattan , align the interests of insiders with shareholders, maximize the value of Aberdeen's investment portfolio and return capital to shareholders. Details of the plan include:
- A return of significant cash to shareholders
- Radical improvements in governance including an immediate end to related party transactions and self-dealing
- A dramatic reduction and realignment of insider compensation which the Concerned Shareholders believe can reduce compensation by in excess of 80%
- A dramatic reduction in operating costs and cash burn by approximately 60% so Aberdeen is in line with comparable peers
- A thorough review of Aberdeen's portfolio to determine the optimal way to maximize value from each investment and the entire portfolio as a whole
- The pursuit of all available avenues to recover ill-gotten gains from insiders for the benefit of all Aberdeen shareholders
Aberdeen's "Specific Action Plan" Versus the Facts
Aberdeen outlined its specific action plan to enhance long-term shareholder value including:
1. "As Aberdeen has traditionally done, initiating a normal-course issuer bid to buy back shares in an effort to maximize shareholder value."
FACTS: Aberdeen instituted a normal-course issuer bid on February 4, 2010 and again on February 8, 2011 and again on February 23, 2012 and again on May 30 , 2013. Despite these programs being in place Aberdeen's total shares outstanding increased during the four years ended October 31 2014, primarily as a result of shares issued to Aberdeen insiders. In addition to this "normal course" dilution, the current Aberdeen insiders just six weeks ago significantly further diluted shareholders by issuing 20 million shares and warrants, equating to dilution of approximately 23%. Given Aberdeen's high cash balance, the Concerned Shareholders see no apparent business purpose for this issuance other than to place votes into the hands of Aberdeen insiders and related parties in advance of a threatened proxy contest, in an apparent attempt to corrupt the democratic process for Aberdeen shareholders.
2. "Implementing a significant cost cutting plan through reduction of salaries, consulting agreements and other on-going overhead costs."
FACTS: Aberdeen's insiders have been compensated over $13 million since January 31, 2011 as shareholders have accumulated net losses of $101 million and the Aberdeen share price has declined 80%. Aberdeen discloses in its management information circular that current insiders will attempt to compensate themselves over $6.2 million in the event that there is a change of control. The Concerned Shareholders expect that the Concerned Shareholder nominees, once elected, will take all actions reasonably possible to ensure that no payments are made by Aberdeen under these arrangements, including by taking Aberdeen and its directors to court.
3. "Alongside Aberdeen's proven capital growth model, focusing investment strategy on investments where Aberdeen can earn income as well as capital returns."
FACTS: Aberdeen's "proven capital growth model" has delivered net losses to shareholders of $101 million since January 31, 2011 equating to a total return of approximately negative 74%. Aberdeen has lent money to 20 related parties where the loans have been subsequently written down, costing Aberdeen shareholders over $22 million . One of the beneficiaries of these "forgiven loans" was Stan Bharti's wife. Valencia Ventures, an Aberdeen portfolio investment, loaned money to an Ontario company which had no apparent operations, was owned by Stan Bharti's wife and was solely directed by Stan Bharti's son. Messrs. Bernard Wilson (the supposed "independent chair" of the Special Committee of the Board of Aberdeen ) and John Begeman – were on the audit committee of Valencia Ventures at the relevant time.
4. "Constantly striving for best-in-class leadership and governance practices by enhancing the overall expertise, independence, and accountability of the board, as evidenced by the recent appointment of Bernie Wilson , FCPA, FCA, ICD.D as Lead Director and three new highly qualified directors: John Begeman , Maurice Colson , and the Honorable Ken Taylor, OC."
FACTS: Every Aberdeen director including the three new "independent" directors appointed last week has deep ties to Stan Bharti and have served on the boards of multiple Forbes & Manhattan companies, including in some instances companies that have experienced significant corporate governance challenges.
5. "Enhancing investment portfolio disclosure to facilitate investor understanding and appreciation of portfolio investments and investment strategy together with allocating resources to building market momentum."
FACTS: Just six weeks ago, Aberdeen claimed Meson Capital had made a "false allegation" and the $2,000,000 private placement completed by Aberdeen was "not substantially subscribed" by insiders but was merely 19.1% subscribed for by insiders. Since Aberdeen made this statement it has come to light that, in addition to the 19.1% Aberdeen admitted was subscribed for by insiders, an additional 47.9% of the placement was acquired by Sulliden Mining Capital (SMC.TO), a related party of Aberdeen which is controlled by Stan Bharti and shared 4 of 7 Aberdeen's directors ( Stan Bharti , David Stein , George Faught , and Pierre Pettigrew ) at the time of placement. Additionally, and following repeated requests for disclosure that Aberdeen continues to refuse to provide, it appears to the Concerned Shareholders from a review of Aberdeen's registered shareholder list that the remaining 33% of this private placement was acquired by 2378083 Ontario Inc., a company which shares the same address as numerous Stan Bharti connected companies including Aberdeen itself and whose sole director is yet another individual with significant connections to Stan Bharti and Forbes & Manhattan. Requiring shareholders to take formal court action to uncover details about this private placement which occurred just weeks ago, does not appear to the Concerned Shareholders to be evidence of "enhancing disclosure".
Formal Court Action
The Concerned Shareholders have initiated court proceedings against Aberdeen and certain insiders of Aberdeen (case number: CV-15-10823-00CL) in order to assess the propriety of the recently completed private placement and the enforceability of the change of control payments noted above, and to ensure the Requisitioned Meeting is properly conducted such that the results of the Requisitioned Meeting are a true reflection of the shareholder democratic process and proper governance is upheld at Aberdeen . The Concerned Shareholders believe this action is in the best interests of all Aberdeen shareholders.
Vote Now
Even if shareholders have already voted using management's form of proxy, shareholders can still change their vote by voting the GOLD proxy, as only the latest dated proxy will be counted at the Requisitioned Meeting. Vote the GOLD Concerned Shareholder proxy no later than 5:00 p.m. ( Toronto time) on January 29, 2015 to FREE ABERDEEN .
For assistance and ease with voting your GOLD proxy, please contact D.F. King Canada (toll-free) at 1-800-926-7043 or visit www.freeaberdeen.ca where the GOLD proxy can be easily voted by clicking on the "Vote Now" button.
About Meson Capital Partners LLC and Nightscape Capital (UK) LLP
Established in 2009, Meson Capital is a registered U.S. investment advisor based in San Francisco , USA . Meson Capital is managed by Ryan Morris , a Canadian citizen born in Toronto , Ontario.
Nightscape Capital is an FCA regulated investment advisor based in London , United Kingdom.
Cautionary Statement Regarding Forward-Looking Information
Certain information in this press release may constitute "forward-looking information", as such term is defined in applicable Canadian securities legislation, about the objectives and intentions of Meson Capital and Nightscape Capital as they relate to Aberdeen and Aberdeen shareholders and other matters. All statements other than statements of historical fact may be forward-looking information. Material factors or assumptions that were applied in providing forward-looking information, include, but are not limited to, Aberdeen's future growth potential, its results of operations, future cash flows, ability to monetize assets for stated book value, the future performance and business prospects and opportunities of Aberdeen and the current general regulatory environment and economic conditions remaining unchanged. Should any factor affect Aberdeen , Meson Capital or Nightscape Capital in an unexpected manner, or should assumptions underlying the forward-looking information prove incorrect, the actual results or events may differ materially from the results or events predicted. All of the forward-looking information reflected in this press release is qualified by these cautionary statements. Forward-looking information is provided and forward-looking statements are made as of the date of this press release and except as may be required by applicable law, each of Meson Capital and Nightscape Capital disclaims any intention and assumes no obligation to publicly update or revise such forward-looking information or forward-looking statements whether as a result of new information, future events or otherwise.
SOURCE Meson Capital Partners LLC