We, the shareholders of WEX Pharmaceuticals Inc. ("WEX") listed on TSX; hereby intend to file a petition with the TSX and BCSC, requesting the Authorities to launch an immediate investigation with regard to the deliberate cancellation and postponement of Aug 11 AGM, the timing of issuance of 25% stock to undisclosed “Investors in China”., and bring some justice to the situation.
In preparation of this year’s AGM, the present management of WEX had filed a Notice of Meeting in early June 2006, to set the record date as June 22, 2006 and announced AGM date as Aug 11, 2006. However, a week before the scheduled AGM, the present management cancelled and postponed the meeting to September 29, 2006.
In view of the fact the share value of Wex has dropped by more than 90% within a year under the present management of WEX, various shareholders have expressed their concerns regarding WEX leadership and poor performance. Subsequently, a group of WEX’s dissatisfied shareholders, led by Dr.Cohen & Dr.Du Souich, announced on July 31, a Yellow Proxy with proposal of a new board to bring back the needed direction and leadership. Within a week of the mailing, a significant number of WEX shareholders voted for Yellow proxy, indicating that most of WEX shareholders would desire a change of leadership. It is obvious that a win would have occurred should the AGM have proceeded as officially scheduled.
In light of the imminent change, the present management along with the dysfunctional board deliberately manipulated the already announced AGM date to avoid loosing on the vote, on the excuse that a former employee of WEX might taint the election process. They are unblushingly squandering the shareholders’ limited financial resources at WEX by hiring several lawyers to exert legal pressure on the dissident proxy leaders. Their sole purpose is to deliberately thwart the efforts and deny the legitimate right of the dissident shareholders, who are now in majority, to kick them out of the Company.
Due to insufficient time allowed for the court of BC to hold a hearing of the Petition filed by the leaders of the dissident shareholder, the AGM could not be held in time and all the Yellow Proxies would have to be voided as a consequence. We understand WEX does not have any Merger & Acquisition currently in process or any significant financial transaction under way. Therefore, the management of WEX does not have any legal right to cancel and reschedule an AGM at will simply because they are facing the prospect of losing on the shareholders’ votes.
Never before in the corporate history of the whole North America, has corporate Canada seen a case like WEX in which the management of a listed corporation goes as far as to manipulate the officially scheduled date of AGM to keep their jobs in total disregard of the Company’s majority shareholders rights.
In the recent Aug 21, 2006 News Release from WEX, the company is issuing approximately 8 million shares to certain investors from China. The private placement price is at historical low with 25% dilution by gaining only about four months working capital at its current burn rate. We are questioning the timing, the subscriber, the use of proceed and the motive of such financing. Why the company does not engage any financing earlier this year when the working capital was below 12 months and the share price was above $1.00? Why the recent announced private placement did not offer to all shareholders but only to certain selected ones? Who are the subscribers in China? Do they associate with the current management? What is the real purpose of use of the proceed? Besides as annouced use as general working capital, is this amount allocated to acquire Chinese generic companies? Is this another tactic for current management to gain control before the rescheduled Sept 29 AGM? According to the TSX definition, 20% ownership (either a person or a group) of a public company effective forms a controls block and subject to proper disclosure.
Now the dissident group is forced to spend substantial additional capital to proceed whereby the current leadership can use the corporate treasury. This is absolutely unfair and an injustice for company’s majority shareholders.
Again we ask you to look into this atrocity and bring justice to the situation.
We, the undersigned, call on the TSX/BCSC to reinstate the Aug 11 AGM and re-validate the effect of Yellow Proxy and to investigate the details of Aug 21,2006 proposed private placement transaction.
The TSX to investigate WEX petition to TSX & BCSC was written by TTX FANCLUB and is in the category Justice at GoPetition.