OTTAWA,
ON, Feb. 7, 2023 /CNW/ - Mastro Capital Inc.,
a long-term shareholder Altai Resources Inc. (TSXV: ATI) (the
"Company" or "Altai"), announces that it is seeking a
formal meeting with the board of directors of Altai to have a
constructive conversation regarding, among other things, Altai's
operations, management, strategy, capital allocation policies, and
the composition of its board of directors, the whole with a view
toward the long-term value creation for all shareholders. It
is time for change at Altai.
On December 19, 2022, Mastro
Capital sent to the Company's Chairman of the board of directors,
Mr. Niyazi Kacira, an email letter (the "December 19, 2022 Email") expressing Mastro
Capital's disappointment at the manner in which Altai is currently
being run and to formally request a call or meeting before the
ill-timed annual meeting of shareholders of Altai (December 23, 2022). Unfortunately, Mastro
Capital did not receive a satisfactory reply from Altai and indeed
is still waiting for the Company to contact its
representatives. The silence is deafening.
Mastro Capital continues to be disappointed with the lack of
transparency and communication with shareholders as well as the
continued underperformance and lack of direction shown by the
Company. Mastro Capital reiterates its willingness to meet
with the board of directors of Altai and is reserving all of its
rights as a shareholder, including the possibility of
requisitioning a special meeting of shareholders if the board of
directors of Altai continues its unresponsive behaviour.
A copy of the December 19, 2022
Email is reproduced below:
"December 19, 2022
The Board of Directors of Altai Resources Inc.
895 Don Mills Road, Two Morneau Shepell Centre
Suite 900
Toronto, Ontario
M3C 1W3
Attention: Mr. Niyazi Kacira, Chairman, President (also acting
as CEO) and Director
Dear Mr. Kacira,
We are writing to express our disappointment at the manner in
which Altai is currently being run and to formally request a call
or meeting with you in order to discuss our concerns, including as
regards the apparent lack of appropriate corporate governance,
continuous disclosure deficiencies and filing delays and
non-existent shareholder communication. We are sure that there are
like-minded shareholders given Altai's recent history and
governance track record.
Mastro Capital is a long-term shareholder, and we want what is
best for Altai. As you know, our president, John Mastromattei, has attended previous
shareholder meetings and attempted to reach out to you regarding
Altai and its future plans, but there has been no credible response
from any member of the executive management team.
You and the rest of the board must take responsibility for the
company's continued underperformance and lack of direction since
the moratorium and expropriation affecting the Quebec oil and gas properties. Altai has lost
its way, and the business needs to be fixed. There should be no
other objective and no distractions. The board should not allow
another dollar to be spent on unproductive assets and passive
investments in stocks – no one invested in Altai so that we could
own Canadian bank stocks. Altai is not an exchange traded fund and
the fundamental abandonment of its business is an affront to
corporate democracy. The board must have a proper plan as to how it
intends to pursue the best interests of the company and, by
extension, the creation of long-term shareholder value and Altai
should be conveying that plan to its shareholders and the investing
public in a full and transparent way.
We are quite troubled by what we believe to be serious corporate
governance deficiencies, namely: (i) the Altai board is made up of
only four directors, two of whom are not independent and,
therefore, the company is in breach of applicable Canadian
securities laws corporate governance guidelines and the policies of
the TSX Venture Exchange; (ii) no separation of the roles of CEO
and Chairman; (iii) no full time Chief Financial Officer; (iv)
consistently calling and holding annual shareholder meetings late
for a reporting issuer that has a December
31 year end (for example, last year's meeting was held in
September and this year's meeting is scheduled for Friday, December 23, at 11:30am before the holiday long weekend); and (v)
irregular filing or omission of certain documents, for example (A)
the notice of meeting, form of proxy and circular are all dated
November 22, 2022 and yet they were
only filed on SEDAR on December 2,
2022, (B) the statement of executive compensation (Form
52-102F6) was not filed at all, and (C) the forms required by NI
51-101 were not filed at the same time as Altai's audited financial
statements.
In addition, we find that the timing of this year's annual
meeting demonstrates a particular disregard for shareholder
democracy and gives the impression that Altai is not at all
interested in shareholder participation and having a meaningful
dialogue with its shareholders. Issuers with December 31 year ends typically hold their annual
meetings before the end of June of the following year. Instead of
holding Altai's 2022 annual meeting in June where there is a good
chance of shareholder participation, the board decided to choose a
date and time at which it knows shareholder participation would
likely be at an all-time low. In sum, it just sends the wrong
message and wreaks of director entrenchment.
Mastro Capital invested in Altai because it believed in the
story and the management team at the time. We still think that the
company can do great things, but we are disappointed with the
performance of the board and management and feel that it is time
for a change. Mastro Capital wants to have a constructive
conversation regarding, among other things, Altai's operations,
management, strategy, capital allocation policies, and the
composition of its board of directors, the whole with a view toward
the long-term value creation for all shareholders.
Based upon the most recent management proxy circular, we can
confirm that Mastro Capital is a significant shareholder of Altai
holding more than 5% of the issued and outstanding shares. We know
that that amount gives Mastro Capital the power to call a special
shareholder meeting.
Given that Altai's annual shareholder meeting is on December 23, we would need to hear from you by
return email before 5:00pm ET on Tuesday,
December 20, 2022. If we do not hear from you and agree on
an acceptable date and time to have a meaningful discussion before
the annual shareholder meeting, we will assume that Altai is not
willing to do so.
While we would prefer to have a constructive conversation, we
reserve all of our rights and will do what is necessary to protect
our interests as shareholders of Altai and to hold the board
accountable.
We look forward to receiving your reply.
Regards,
John Mastromattei
President, Mastro Capital"
About Mastro Capital
Founded in 2017 by John
Mastromattei, Mastro Capital is a private investment company
100% owned and controlled by Mr. Mastromattei. Mastro Capital has a
successful track record of identifying and supporting early stage
companies in the natural resource, biotechnology and financial
services sectors, and has made several successful exits.
Disclosures
Mastro Capital has been an Altai shareholder for 6 years. Mastro
Capital currently owns more than 5% of the shares outstanding and
is committed to the long-term success of Altai.
This news release does not constitute (and may not be construed
to be) a solicitation or offer by Mastro Capital or any of its
directors, officers, employees, representatives or agents to buy or
sell any securities of any person in any jurisdiction, or a
solicitation of a proxy of any securityholder of any person in any
jurisdiction, in each case, within the meaning of applicable
laws.
SOURCE Mastro Capital Inc.
