Wrap Text
Eastplats: Dissident Ka An’s Nominees Have Poor Track Records
EASTERN PLATINUM LIMITED
(Incorporated in Canada)
(Canadian Registration number BC0722783)
(South African Registration number 2007/006318/10)
Share Code TSX: ELR ISIN: CA2768555096
Share Code JSE: EPS ISIN: CA2768555096
June 8, 2016
Trading Symbol: ELR (TSX), EPS (JSE)
NEWS RELEASE
Eastplats: Dissident Ka An’s Nominees Have Poor Track Records
VANCOUVER, June 8, 2016 – Eastern Platinum Limited (“Eastplats” or the “Company”) today
reported on the collectively poor track record of the six candidates nominated by dissident Ka An
Development Co. Limited (“Ka An”), which seeks to replace Eastplats’ board of directors.
“The history and experience disclosed by the Ka An nominees highlights their association with a
number of companies that delivered staggering losses to shareholders,” said David Cohen,
Eastplats’ Chairman, President and CEO. “Collectively, the Ka An nominees may put Eastplats at
risk based on their past performance, a lack of disclosed experience in platinum mining and South
Africa, and a lack of personal shareholdings in Eastplats.”
Eastplats urges shareholders to vote the YELLOW proxy FOR the incumbent board prior to the
proxy voting deadline of 10:00 AM (Vancouver Time) on Thursday, June 30, 2016. The Annual
General Meeting is scheduled for July 5, 2016. For more information, shareholders should read
Eastplats’ recently filed and mailed Management Information Circular and letter to shareholders.
The Ka An nominees: share price declines of up to 100%
The six Ka An nominees disclosed director and/or officer roles with fully 20 publicly traded
companies in their press release of May 9, 2016. Nearly all of those companies have performed
poorly, with share price declines of up to 100% and a collective average share price decline of 65%
during the tenure of the Ka An nominees. Some have suffered cease trade orders or bankruptcy.
Eastplats is concerned that, as detailed below, Ka An’s nominees will not perform well if they
replace the Company’s current board.
Additionally, the Ka An nominees’ biographies do not disclose the full story with regard to their
track records. Some of their undisclosed roles with publicly traded companies have also left those
shareholders with significant losses in what Eastplats views as dubious circumstances, as described
below.
The Ka An nominees have disclosed no personal ownership of Eastplats shares, no platinum
mining experience and no Southern African or South African working/mining experience. These
are critical failings. They contrast starkly with the incumbent board’s personal investment in
Eastplats coupled with extensive experience in South Africa and Eastplats’ South African platinum
mining business, as outlined in detail in Eastplats’ Management Information Circular.
In the table below, Eastplats has summarized the relevant experience of Ka An’s nominees:
A Summary of Ka An Nominee Information(1)
Platinum South ELR Shares Average Share Performance of
Nominee Mining African Personally Disclosed Public Companies
Experience Experience Held During Tenure
George Dorin None None Zero -92%
George Pirie None None Zero -90%
Michael Cosic None None Zero -84%
Douglas Perkins None None Zero -74%
Peter Clausi None None Zero -49%
Sam Wang None None Zero -44%
Average -65%
(1) Based on Ka An’s Public Disclosure (May 9, 2016) and closing stock prices on June 6, 2016 for current
companies. For specific details on the stock price performance of each company please see the table at
this link on Eastplats’ website. See below additional hyperlinks with underscored text for supporting
documentation posted to Eastplats’ website.
Ka An nominee George Dorin: Poor performance, four cease trade orders
During George Dorin’s tenure as a director on the boards of the four companies that he has
disclosed, he has achieved an average share price decline of 92%.
While Mr. Dorin discloses that he served as a director of two companies that have faced cease-
trade orders, he omits from his Ka An biography two more cease trade orders for problems that
came to light on his watch. All four of these cease trades, as described below, involve a failure to
file financial statements in accordance with securities law and contributed to significant
shareholder losses.
In Eastplats’ view, these four cease trades illustrate Mr. Dorin’s inability to effectively direct and
control public companies and shortcomings in the exercise of his fiduciary duties. These four cease
trades also bring into question his ability to make objective judgments about the foreign investors
who request his participation as a director and with which he becomes involved. Eastplats’
shareholders should be concerned that these issues will be perpetuated by Mr. Dorin as a nominee
of Hong Kong-based Ka An.
Cease trade #1: Undisclosed – Vancouver-based Asia Packaging Group Inc. (TSX-V:APX),
where Mr. Dorin served as a director and audit committee chair for 19 months. It is important to
note these relevant facts:
- The British Columbia Securities Commission ordered a cease trade of Asia Packaging on
December 6, 2013, just eight days after Mr. Dorin resigned.
- Mr. Dorin’s resignation announcement cites, among other problems, the board’s failure to
communicate with, or obtain cooperation from, Asia Packaging’s overseas-based
controlling shareholder, who was also President and CEO.
- In British Columbia and Alberta, Mr. Dorin and others now face lawsuits related to Asia
Packaging. The claim filed in BC Supreme Court includes allegations that the defendants
acted “in breach of their duties,” that they made “misrepresentations” and that they are
liable for “failing to act in the face of trading by insiders prior to the investing public being
informed.” The defendants have engaged lawyers but have not yet filed their defenses.
- Shareholders lost in effect 100% of their investment, as Asia Packaging’s shares never
resumed trading.
Cease trade #2: Undisclosed – China-based Xianburg Data Systems Canada Corp. (TSX-
V:XDS), where Mr. Dorin served as Chief Financial Officer for approximately five months. The
Globe and Mail, in an article published June 20, 2011, described Xianburg as “one of the quickest
trips from listing to suspension in Canadian market history.” It is important to note these relevant
facts:
- The BC Securities Commission ordered a cease trade of Xianburg on May 10, 2011, just
16 days after he resigned.
- In the news release announcing Mr. Dorin’s resignation, Xianburg also disclosed a “default
announcement” proclaiming that it would be late in filing required financial statements,
which were due within a few days.
- Xianburg was cease traded a mere four months after Xianburg issued a news release
celebrating its first listing on the TSX-V.
- As with Ka An and Asia Packaging, certain controlling shareholders of Xianburg were
based overseas. The details are in Xianburg’s Management Information Circular dated
December 12, 2011.
- As with Asia Packaging, shareholders in effect lost 100% of their investment as
Xianburg’s shares never resumed trading.
Cease trade #3: Disclosed – Vancouver-based China Keli Electric Co. (TSX-V:ZKL), where Mr.
Dorin has been a director and chair of the audit committee since May 5, 2010. It is important to
note these relevant facts:
- The BC Securities Commission initiated the China Keli cease trade on September 8, 2014
and kept it in place for more than ten months.
- Again as with Ka An, Asia Packaging and Xianburg, certain controlling shareholders of
China Keli are based overseas. China Keli’s Management Information Circular dated
November 2, 2015 provides the details.
- The share price has declined by 81% since Mr. Dorin joined the board.
Cease trade #4: Disclosed – Vancouver-based Huaxing Machinery Corp. (TSX-V:HUA), where
Mr. Dorin has served as a director and chair of the audit committee since June 6, 2013. It is
important to note these relevant facts:
- The BC Securities Commission imposed the cease trade on February 26, 2015 and has not
revoked it.
- As disclosed in a Huaxing news release, the company did not complete an audit for 2014,
which was to include restated financial statements for the prior year (the year Mr. Dorin
became a director and chair of the audit committee).
- As with Ka An, Asia Packaging, Xianburg and China Keli, certain controlling
shareholders of Huaxing are based overseas. Huaxing’s Management Information Circular
dated June 24, 2014 provides the details.
- Like Asia Packaging and Xianburg, shareholders have in effect lost 100% of the value of
their investment as Huaxing’s shares never resumed trading.
Mr. Dorin has disclosed two other public company board memberships, and the performance of
those companies should also raise concern for Eastplats shareholders:
- Sino Rise Group Holding Corp. (C:SHD) – the share price of this company has in effect
declined by 100%. There are no bids for the shares and they have not traded since January
2016. As noted in Sino Rise’s listing document dated April 29, 2016, the head office, CEO
and certain major shareholders of Sino Rise are overseas and the auditor notes “the
existence of a material uncertainty that may cast significant doubt about the Company's
ability to continue as a going concern.”
- Gourmet Ocean Products Inc. (TSX-V:GOP) – the share price of this company has
declined by 85%. As detailed in the Management Discussion and Analysis dated May 25,
2016, Gourmet has incurred net losses for each of the most recent eight quarters.
Ka An nominee George Pirie: Resignations ahead of bankruptcies
George Pirie’s biography lists him as an officer or director of three publicly traded companies but
omits any description of the performance of those companies during his tenure. On average they
declined by 90%.
- During Mr. Pirie’s tenure as CEO of Val-D'Or -based Northern Star Mining Corp. (TSX-
V:NSM; OTC:NSMSF), the share price declined by 84% and the shares were effectively
worthless not long afterwards. His resignation and the company’s bankruptcy were
announced on January 24, 2011.
- Subsequent to Northern Star, Mr. Pirie, as President and CEO of Winnipeg-based San
Gold Corporation (TSX:SGR), presided over a 93% share price decline. He resigned on
March 25, 2013 and approximately 18 months later San Gold announced that it was
seeking protection from creditors under the Bankruptcy and Insolvency Act (Canada). It
went bankrupt shortly thereafter.
- The third underperforming company listed in his biography is Sudbury-based Canadian
Arrow Mines Ltd. (TSX-V:CRO), the only company for which he still serves as a director.
Its share price has declined by 92% during his tenure.
Eastplats believes that, again, disturbing questions arise with regard to Mr. Pirie’s exercise of
judgment and fiduciary duty based on the bankruptcy of Northern Star and San Gold and the poor
performance of Canadian Arrow.
Ka An nominee Michael Cosic: Limited experience, poor performance
Michael Cosic, who is currently unemployed according to his Linked-In profile, has not disclosed
any board positions with publicly traded companies. He lists only one company in his biography.
For that company, Toronto-based Lithium Americas Corp. (TSX:LAC), he served as an officer
for six years ending in November 2015.
The biography fails to mention that the share price declined by 84% over this period. Shareholders
should question what value Mr. Cosic would bring as a director.
Ka An nominee Douglas Perkins: Poor performance, omission of pertinent information
Douglas Perkins is not currently a director of a publicly traded company but he has disclosed prior
service on boards of two publicly traded companies. Both underperformed with an average decline
of 74% during his term of service. The poor performance during his tenure is not mentioned in his
biography.
Mr. Perkins’ biography does not mention his pertinent board service from March 2011 until July
2013 with a third publicly-traded company, Ottawa-based Mindesta Inc., (OTC:MDST). During
his tenure of approximately two years, Mindesta’s share price declined by 99%.
Shareholders should question whether Mr. Perkins brings any value to Eastplats or is a suitable
director based on the poor performance of Mindesta and the other companies on whose boards he
has served.
Ka An nominee Peter Clausi: Poor performance, cannabis experience is not pertinent
Peter Clausi’s biography discloses that he currently serves on the board or is an officer of four
publicly-traded companies. While there is no description of the performance of these companies,
on average they dropped by 49% during his tenure. This poor performance is omitted from his
biography.
Shareholders should question Mr. Clausi’s value to Eastplats and whether he is suitable as an
Eastplats director based on the poor performance of the companies for which he currently serves as
a director or officer. Additionally, shareholders should evaluate whether his experience in the
cannabis sector with Green Swan Capital Corp. (TSX-V:GSW) is relevant to underground
platinum mining in South Africa.
Ka An nominee Sam Wang: Poor performance, dizzying array of simultaneous roles
Sam Wang’s biography omits any description of the performance of the seven publicly-traded
companies on which he has disclosed having served as a director or officer. On average they
declined by 44%. The poor performance during his tenure is not mentioned in his biography.
Mr. Wang is reported to simultaneously serve as Chief Financial Officer of five companies,
Corporate Secretary of two companies, and a director of three companies. Yet his biography omits
Xianburg Data Systems Canada Corp (described above), where Mr. Wang was a director and
chair of the audit committee. This was at approximately the same time as fellow Ka An nominee
George Dorin served as Xianburg’s CFO.
Mr. Wang resigned from Xianburg’s board in April 2011 at approximately the same time as Mr.
Dorin resigned as CFO, and just before the BC Securities Commission ordered a cease trade of the
shares for failure to file financial statements.
Mr. Wang still works together with Mr. Dorin at Sino Rise Group Holdings Corp. (described
above), where Mr. Wang is a director and CFO and Mr. Dorin is a director and chair of the audit
committee. The shares have not traded since January and are essentially worthless, with no bids.
Just as with Mr. Dorin, Eastplats believes that shareholders should question Mr. Wang’s exercise of
judgment and fiduciary duty based on his involvement with Xianburg and Sino Rise, as well as the
poor performance of several of the other publicly traded companies for which he has disclosed
service as a director or officer. Additionally, as the CFO of five listed companies, shareholders
should question his ability to engage proactively and fully in Eastplats’ business as a director.
Vote the YELLOW proxy FOR the incumbent board
Shareholders, to safeguard their investment in Eastplats, should vote the YELLOW proxy FOR
the incumbent board. Don’t place Eastplats’ assets and treasury under the control of nominees with
a history of questionable exercise of their fiduciary duties and woeful track records during their
tenures as directors or officers of other publicly traded companies.
Eastplats and its shareholders have been well-served by the incumbent board, which is in the best
position to guide Eastplats forward. As further described in Eastplats’ Management Information
Circular, the incumbent board has maintained an undiluted shareholder base over the last five years,
keeping its assets in good order, protecting its strong balance sheet, and navigating Eastplats safely
through perilous times in the platinum market. The Board has also continually explored alternatives
to enhance shareholder value and will continue to do so.
Even as US dollar denominated prices have declined for platinum group metals, Eastplats’ shares
have maintained their value due to the board’s strategic decision three years ago to place Eastplats
operations on care and maintenance. Eastplats has outperformed its peers since then and unlike its
peers, Eastplats has not diluted shareholders with equity financings at distressed prices. The
interests of the incumbent board are aligned with shareholders.
Your vote counts, no matter how many shares you own. Vote now to protect your investment in
Eastplats. Vote the YELLOW proxy FOR the incumbent board.
How to Vote
The proxy voting deadline is 10:00 AM (Vancouver Time) on Thursday, June 30, 2016.
For assistance voting your shares, please contact Eastplats’ proxy solicitation agent, Laurel Hill
Advisory Group toll free in North America at, 1-877-452-7184 (+1-416-304-0211 collect outside
of North America), or by email at assistance@laurelhill.com.
For further information:
Eastplats’ proxy solicitation agent: Laurel Hill Advisory Group
Toll free in North America:1-877-452-7184
Outside of North America, collect at: (+1) 416- 304-0211
Email: assistance@laurelhill.com
OR
David Cohen
Chairman, President and Chief Executive Officer
Tel: (+1) 604-689-9663
info@eastplats.com
www.eastplats.com
No stock exchange, securities commission or other regulatory authority has approved or
disapproved the information contained herein.
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