Sirius Update #8, 6 March 2020

The Anglo offer to acquire Sirius has been approved by shareholders.

There is general disappointment due to the crystalisation of losses for many investors but, as the Chairman said at the meeting, this was the only deal on the table.

57% of shares were not voted. Georgeson, voting advisers to Anglo, are experts: they knew this would occur and Anglo could win the vote with their miserly 5.5p offer.

In my opinion, Anglo would have had to offer more if the nominee system had not obstructed communications with shareholders. If individual shareholders were not disenfranchised, a different result might have resulted.

Just 1,314 members out of around 7,500 on the register voted, a paltry 17.5% voter turnout. This is appalling. Shareholder voting has to be made easier and we must be sure information is reaching shareholders. Putting the ultimate investor’s name on the register is a necessary step to improve voting and shareholder democracy.

From the perspective of the 50% test in the Court Meeting, only 1,314 out of 85,000 beneficial shareholders’ views were counted. That’s 1.5%! So 1.5% of the people who “owned” Sirius shareholders decided whether the takeover should proceed.  We will never know how many were too late to enact the Hargreaves Lansdown (Heath Robinson) solution of transferring one share onto the register in order to vote, or indeed whether this approach actually works.

I will write to Nick King, Company Secretary at Sirius, and ask if there were any spoilt ballot papers and how many were rejected. It was clear from looking the ballot papers completed by some beneficial holders that they had no clue how to complete the very ambiguous document.

In the event those hoping that the takeover would not be approved would have only required 300 more to achieve their aim.

Our voting considerations paper steered a tricky path through these problems with reasonable aplomb!

Here is the link to the Sirius announcement:

https://www.investegate.co.uk/sirius-minerals-plc–sxx-/rns/results-of-court-meeting-and-general-meeting/202003040700019184E/

Sirius has since announced the Court Hearing will take place on 13 March. This will be in the High Court in London, with most of the submissions in written form.

GM and Court Meeting write up. I have not written a write up of the meeting as there was so much coverage in the press and there is not much added value in me repeating that.

Francesca Washtell of the Daily Mail attended and provided a great live report via twitter, which you can access at:

https://twitter.com/fwashtell/status/1234797648034639872

The Guardian did quite a good write up and has the added benefit it is free to read online:

https://www.theguardian.com/business/2020/mar/03/sirius-minerals-takeover-at-risk-after-investor-rebellion

Next steps

There have been a number of comments on the SSSG Forum, the Facebook Group and in various chatrooms, in the past few days, about legal claims and redress and class actions. The SSSG team and others have been looking at this from the very start. We will meet on 10 March to agree our strategy, goals, next steps, and roles with regard to potential legal redress.

We are developing a briefing pack to give to lawyers who might take on the case. ShareSoc have good links with a number of firms that could take on this case. I met with one firm yesterday that is investigating the possibility of a class action against Hargreaves Lansdown in relation to their alleged promotion of the Woodford funds.

Please note that time is no longer of the essence, and the process changes gear from this point. It is essential to take time to properly review the events leading up to the failure of the company and to focus only on matters that have the potential to result in a successful claim.

We will do this with our panel of legal funders to establish whether there is support for a no-win-no-fee approach. This has the dual benefit of weeding out claims without merit or without reasonable chance of success, while removing the need for ex-shareholders to throw further money at the Sirius debacle.

There would also appear to be a number of issues to raise with the FCA. I met the FCA yesterday (this was part of my regular quarterly update meeting with them, where we cover numerous issues) and we touched on Sirius and how best to approach this and what issues might fall under their remit.

We will continue to update all SSSG members with progress, but expect these updates to less frequent in the future as the next steps will take some time.

Can I ask those of you who joined SSSG for free to please make a little financial contribution to ShareSoc to help us with this and with our other efforts to improve shareholder rights for individual investors. Full membership is £45 a year. https://www.sharesoc.org/membership/full-membership/ You will also get the benefit of access to the SSSG Forum, which now has over 70 pages of comments, questions and answers.

 

Cliff Weight

ShareSoc Director and SSSG Team member

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