| Mon 21 Sep 2009, 7:53 | | SIM - Simmers Directors Resign Over Conflict Of Interests |
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SIM
SIIF
SIM - Simmers Directors Resign Over Conflict Of Interests
Simmer & Jack Mines, Limited
(Incorporated in the Republic of South Africa)
(Registration number 1924/007778/06)
Share code: SIM
ISIN Code: ZAE000006722
("Simmers" or the "Company")
SIMMERS DIRECTORS RESIGN OVER CONFLICT OF INTERESTS
The Company wishes to clarify recent incorrect media reports that the exodus of
five directors from the Simmers board on Saturday, 19 September 2009, relates to
a BEE dispute. In fact the main issue discussed at the board meeting which
resulted in the resignation of four of the five directors related to breaches of
directors` fiduciary duties.
The Simmers board convened on Saturday at the request of Mr Kevin Wakeford with
the aim of replacing the incumbent chairman before the Simmers AGM on Monday, 21
September 2009.
Mr Wakeford`s request was given priority on the agenda and issues of conflicts
of interests and corporate governance were added to the agenda. In the course of
the board meeting Mr Wakeford withdrew his proposal to elect a chairman and
agreed to the normal procedure whereby directors appoint the chair after the
AGM.
The Simmers board then addressed the dispute between Vulisango and the Company
and the conflicts of interest between the Vulisango directors and the Company
arising out of that dispute:
- Incorrect information as well as inside information available only to the
governance committee was leaked by Mr Wakeford which resulted in its being
disseminated to selected shareholders and which may have resulted in
unusual trading volumes and share price weakness as experienced in the past
few days;
- The leaking of confidential information to selected shareholders in an
attempt to assert Vulisango`s interests over that of the Company, causing
directors of Vulisango who are also directors of Simmers to breach their
fiduciary duties to the Company;
- Unilateral and unauthorised engagements with the Department of Mineral
Resources (DMR) designed to harm Simmers` relationship with the regulatory
body and prejudice its standing with the DMR;
- Attempting to procure that other legitimate BEE shareholders are
disqualified from counting towards the BEE equity ownership requirements;
- Alleging in court papers pertaining to Vulisango`s dispute with JCI Limited
that Simmers was party to securities fraud arising from the Simmers Rights
Issue in 2005. This despite the fact that these same allegations were made
in 2006 and were subsequently the subject of an independent forensic audit
which gave the Company a clean bill of health;
- The issuing of misleading information regarding Simmers` mining rights; and
- An attempt to remove the current CEO and CFO of Simmers and assume control
of the board.
As a consequence, the Simmers board resolved that Kevin Wakeford, Baba Njenje,
Siviwe Mapisa and Ayanda Sisulu-Dunstan have unresolved conflicts of interests
which have resulted in breaches of their fiduciary duties.
Given the unresolved conflict of interests the board resolved to commence the
process envisaged in Section 220 of the South African Companies Act to call an
extraordinary meeting of shareholders to remove the aforesaid directors from
office.
The board also resolved to investigate legal remedies available to the Company
to recover damages from Vulisango, its directors in their personal capacities
and Mr Wakeford in his personal capacity.
The aforesaid directors tendered their resignations of their own free will some
hours after the meeting had closed.
Mr Stuart Murray who was an independent director who chaired the governance
committee, was not in any way involved with any conflict of interest or with the
aforesaid events and resigned prior to the meeting.
Simmers will be working with the various regulatory bodies to investigate any
attempts to manipulate the Company`s share price during the course of the last
week and has requested the JSE to launch an investigation into the possible
manipulation of trading in the securities of the Company.
"Dealing with these matters within a board of directors is both difficult and
painful but it has to be done. Issues of corporate governance can never be
shirked and need to be dealt with swiftly in the interests of all shareholders,"
said Nigel Brunette, chairman of Simmers.
Simmers remains committed to fulfilling the spirit and the requirements of the
Mining Charter and related BEE legislation. The Company`s corporate governance
and nominations committee has instituted a process to recruit independent HDSA
directors to replace the outgoing directors.
Johannesburg
21 September 2009
Sponsor
Macquarie First South Advisers (Pty) Ltd
Enquiries:
Nick Goodwin (Investor Relations Executive) on +27 83 629 8605;
nick@simmers.co.za
Gail Strauss (Communications) on +27 82 936 8481; gail@simmers.co.za
Date: 21/09/2009 07:53:19 Produced by the JSE SENS Department.
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