InDaily

Adelaide's independent news

Support

New attempt to oust Kennedy from Marmota

Companies

Comments
Comments Print article

Marmota Energy’s largest shareholder is again attempting to oust the company’s chairman, high profile Adelaide businessman Robert Kennedy.

Dr Colin Rose, a Sydney-based professional investor and academic economist, says he has “lost confidence” in Kennedy.

With support from the second largest shareholder, Rose has requisitioned a general meeting of the uranium explorer’s shareholders, scheduled for 1 May, to consider motions to remove Kennedy as a director and add Rose as a director.

Rose said he moved to formally remove Kennedy because the company risked becoming a “stranded whale” through a lack of cash.

“If you go back about three years the company had about $3 million in cash in the kitty; in the last year that has dwindled downwards to the point where at the end of the current quarter there will be about $500,000 left in reserves,” Rose told InDaily.

“Most of that money has been spent on essentially directors’ fees and administration. In the last year there has been almost no drilling.

“The company is not without prospects but … if we didn’t act now, by the time it came to the next annual general meeting (in late 2015) the company’s cash position would be down to zero.

“Companies that have cash positions down to zero are left like stranded whales – they can’t raise capital, they can’t drill, they just get stuck.”

Kennedy rejected Rose’s assertion claiming Marmota had spent $1.4 million on exploration in 2014.

“Whilst expenditure on exploration has reduced it is due to the lack of available capital consistent with the change in the market due to the decline of commodity prices,” Kennedy told InDaily.

“However, the company continues to explore within the available funds.  As an alternate to spending company monies for exploration it has joint ventured tenements with other companies who are carrying out exploration to earn their interest in the tenements.

“The directors have no intention of running down the company’s capital to zero. In fact, Dr Rose’s action is delaying legitimate capital raising by his threats to ‘injunct, revoke, reject, unwind, and/or annul’ any capital raising whilst he attempts to take control of the company.”

Rose says he has spoken to a number of the top 20 shareholders and believes he has “dominant” support for his resolution to remove Kennedy from the Marmota board.

“There are very, very few people who are willing to support the status quo. The feedback that I got was other people in the top 20 were comfortable with the other board positions and thought they were doing a good job (but) they weren’t as happy with Robert (Kennedy),” he said.

Kennedy also challenged this view of the attitude of shareholders.

“The reaction that I have had from a number of shareholders who have spoken to me and written to the company is one of outrage that Dr Rose, who has already had one opportunity to vote me down at the last AGM (as I stood for re-election), and who holds less than a controlling interest, is wasting the company’s money by calling another meeting four months after the last AGM,” Kennedy said.

“Dr Rose has refused to make contact with me after a number of invitations to meet in Adelaide,” he said.

Rose said he had talked to members of the board and asked them to consider cutting their salaries “which would have been an immediately saving of about $84,000 a year with respect to Robert Kennedy’s salary package”.

But Rose said the response he received was “they were cutting everything else except their own salaries”.

Kennedy has rejected the move to remove him, describing the meeting as “a waste of shareholders’ money as the new candidate (Rose) has no relevant experience or standing”.

In a letter to shareholders, Kennedy says the board is currently considering a proposal that would allow directors to take part of their fees as share options to reduce its cash outflow.

The letter also says Marmota has reviewed its operations and will adopt “a more focussed approach with less emphasis on frontier exploration and more on assets that can be commercialised”.

“The focus has moved to solely uranium, copper, gold and nickel with non-core projects being taken to joint ventures or sale/relinquishment.

“The company has also taken action to reduce costs to a level commensurate with the business’s new priorities,” the letter says.

Rose said he also had concerns about Kennedy being chairman of Monax Mining while that company had been selling down its shareholding in Marmota, and the potential impact of those sales on Marmota’s share price.

He said that Monax had sold down its original shareholding of 36 million shares in Marmota over the past several years – to now hold around seven million shares – and the Marmota share price had declined from around five cents a share to about one cent over the past two years.

“There is an awkwardness of being the chair of one company and also being the chair of another company that is selling your own shares down – I have always been uncomfortable about that,” Rose said.

Kennedy responded by saying that “any shareholder has the right to sell their shares,” adding “the Corporations Act provides the procedure and  there is a firm corporate governance control (observed in this case) that prevents any conflicted director from not only voting in relation to resolutions to sell shares but also to be absent from the board room when such matters are discussed”.

Marmota received its a ‘first strike’ against its remuneration report at the company’s annual general meeting last year when shareholders representing more than 25 per cent of the votes cast at the meeting opposed the company’s remuneration of its directors.

Under the Corporations Act’s ‘two strikes’ rule, all the directors of a company can face re-election if more than 25 per cent of shareholders oppose the salaries and bonuses of directors and senior executives on two occasions.

Robert Kennedy is also a director of a number of ASX-listed companies including Flinders Mines, Ramelius Resources, Maximus Resources and Tellus Resources.

We value local independent journalism. We hope you do too.

InDaily provides valuable, local independent journalism in South Australia. As a news organisation it offers an alternative to The Advertiser, a different voice and a closer look at what is happening in our city and state for free. Any contribution to help fund our work is appreciated. Please click below to become an InDaily supporter.

Powered by PressPatron

Comments

Show comments Hide comments
Will my comment be published? Read the guidelines.

More Companies stories

Loading next article

Subscribe to InDaily – it’s free!

South Australia’s locally owned, independent source of digital news.

Subscribe now and go in the monthly draw* for your chance to WIN a $100 voucher!

Subscribe free here

*Terms and conditions apply

Welcome back!

Did you know it’s FREE to subscribe?

Subscribe now and go in the monthly draw* for your chance to WIN a $100 voucher!

Subscribe

*Terms and conditions apply