TORONTO, June 26, 2012 /CNW/ - VC & Co. Incorporated ("VC&Co.") announced today that, with the support of shareholders of Cathay Forest Products Corp. ("Cathay") owning approximately 38.5% of Cathay's outstanding shares, VC&Co. will be proposing a new slate of directors for election to the board of Cathay at the upcoming special meeting of Cathay's shareholders to be held on July 30, 2012 (the "Meeting").
As previously announced by VC&Co. on June 21, 2012, the Meeting has been called by Order of the Ontario Superior Court of Justice after Cathay's three existing directors, Man Hung Chan, Hong Tat Honda Cheng and Stephen H. Miller, failed to call a shareholders' meeting despite being legally required to do so. In ordering the Meeting, the Court found that the "dysfunctional state of affairs" that exists at Cathay, and the "profound misunderstanding by the incumbent directors of their corporate governance duties", necessitated Court supervision in relation to the Meeting.
At the Meeting, VC&Co. will be seeking the removal from office of each of the current directors of Cathay and the election of the following four individuals (the "New Director Nominees") as directors of Cathay: (i) J. Bruce Barraclough, (ii) Peter K. Brown, (iii) C. Ian Ross, and (iv) Michael D. Woollcombe.
The reasons for supporting the election of the New Director Nominees, including details of their background and experience, are set forth in a proxy circular of VC&Co. dated June 20, 2012 (the "VC&Co. Circular"). The VC&Co. Circular and accompanying WHITE form of proxy have been filed with applicable Canadian securities regulators and are accessible on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com. These materials have also now been mailed to Cathay's shareholders.
The VC&Co. Circular highlights the many reasons why it is necessary and in the best interests of Cathay and all its shareholders to replace Cathay's existing directors with the New Director Nominees at the Meeting, including:
- Under the watch of Cathay's current directors, Cathay has made no apparent progress towards responsibly addressing its circumstances or realizing any value for shareholders.
- Since Cathay's last shareholders' meeting almost two years ago, Cathay's shareholders have been increasingly left in the dark about their company.
- Cathay's current board has demonstrated a pattern of persistent failures to respect fundamental corporate governance principles and has failed to comply with even the most basic requirements of corporate and securities law, including most recently by failing to call a shareholders' meeting despite being legally required to do so.
- Cathay has failed to provide shareholders with the disclosure required to keep them informed regarding Cathay's business and affairs, including by failing to provide financial statements for any period subsequent to September 30, 2010 with the result that Cathay's shares have been cease traded by the Ontario Securities Commission and de-listed from the TSX Venture Exchange.
With the support of Cathay shareholders owning a significant proportion of its outstanding shares, VC&Co. has developed a plan (the "Reconstitution Plan") to reconstitute Cathay's board with the New Director Nominees who will implement a responsible value maximization strategy to proactively realize on Cathay's assets, including its assets in Russia and China, with a view to distributing Cathay's net value to its shareholders as soon as reasonably practicable. The Reconstitution Plan, which is described in greater detail in the VC&Co. Circular, already has the support of 10 of Cathay's largest Canadian shareholders, who collectively hold approximately 38.5% of Cathay's outstanding shares.
VC&Co. believes, as do the shareholders of Cathay that support this initiative, that the Reconstitution Plan is in the best interests of Cathay and that the proposed New Director Nominees will provide the leadership that Cathay requires. As described in the VC&Co. Circular, the New Director Nominees have proven capabilities and track records and the necessary skills, experience and commitment to proactively complete the myriad of actions urgently required to protect the interests of Cathay and its shareholders.
Shareholders of Cathay are encouraged to contact Shane A. Priemer (tel. no: 416-947-1448) of VC & Co. Incorporated with any questions or if they require assistance in voting the WHITE form of proxy that accompanies the VC&Co. Circular. To ensure that their votes count, Cathay shareholders are asked to send their completed, dated and signed WHITE proxies to Equity Financial Trust Company, the scrutineer and proxy depository for the Meeting, as soon as possible, either by facsimile (to fax no. 416-595-9593) or in person, by courier or by mail to 200 University Avenue - Suite 400, Toronto, Ontario M5H 4H1. To be effective, a proxy must be received by Equity Financial Trust Company not later than July 25, 2012 at 5:00 p.m. (Toronto time), or in the case of any adjournment of the Meeting, not less than 48 hours, Saturdays, Sundays and holidays excepted, prior to the time of the adjourned meeting.