Deancorp's principal, Malcolm Fraser-Clay, called the meeting to request shareholders remove the existing board, replace the current directors with Deancorp's nominees and to obtain shareholder approval for the issue of shares to a related party of Deancorp, in return for a loan of $500,000.
However, Vice Admiral, D.B Chambers, chairman of Zylotech's board, stated in a letter to shareholders, the proposed resolutions will not be put forth to shareholders at the EGM.
The EGM will be convened for the sole purpose of considering the appointment of Deancorp's nominees to the Board.
"The resolutions to appoint the candidates proposed by Deancorp are opposed by your current Board who believes they are not in the best interests of the Company of the vast majority of shareholders," stated Chambers.
"Despite challenging economic conditions persisting since its appointment 1 December 2008, the recent termination of the company's CEO and in spite of the Deancorp requisition, the current board has continued to work diligently to advance the company's goals."
He claims the Board is currently; actively negotiating distribution arrangements to enable entry into the Indian market and to further expand its Australian distribution channel; formerly launching Zylotech's Smart G IP surveillance solution with distributor Avnet; and the implementation of cost saving measures in the order of $1.3 million per annum, from the continued re-structure and downsizing of the business.
"The Board, armed with the strong support of the Company's committed and competent new management team, remains dedicated to the continued re-structure of the Company's operations and to bring it profitability in 2010," stated Chambers.
In a previous interview with CRN, Malcolm Fraser-Clay said, he has offered help to the current board but they have regarded him as a threat.
"The company has a very good product and so much of the ugliness hurts the reputation of the senior staff who aren't involved with the board."
Fraser-Clay showed CRN his original requisition fax to the board, which shows an offer of an initial $500,000 investment loan and a further $1 million.
Issue: 315 | May 2013
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