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Annual Meeting Results Invalidated Due to Improper Telephone Proxy Solicitation

August-14-2012

Lawyer Jonathan Feldman
Area Corporate Finance and Securities, Mining and Natural Resources, Shareholder Rights and Activism

Summary

In the recent decision of International Energy and Mineral Resources (Hong Kong) Company Limited v. Mosquito Consolidated Gold Mines Limited, 2012 BCSC 1191, the Supreme Court of British Columbia considered a claim by a dissident group of shareholders that the results of a contested shareholder meeting should be invalidated, principally (but not exclusively) because the use of the telephone proxy solicitation system (“TeleVote”) by the Company’s proxy solicitor was “oppressive and unfairly prejudicial”.  The court found the use of TeleVote – which is a relatively new approach in Canada to solicit votes from shareholders over the telephone – and certain other elements of the conduct of the meeting to be oppressive to the dissident’s reasonable expectations regarding how the meeting would be conducted and invalidated the results of the meeting and ordered that a new vote be held – without TeleVote being used.

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