Caxton and CTP Publishers and Printers have broadsided the management of Mpact for continuing to act in a cartel, following Mpact’s claims that Caxton had “ulterior” motives when it voted against Mpact’s directors pay at the annual meeting.
In an extraordinary take of corporate bad blood, Caxton, Mpact’s largest shareholder with a 34 percent stake, said in a statement on Friday that “far from” having an ulterior motive, Caxton’s intention to acquire control of Mpact had been met with “inexplicable hostility.”
This not only from Mpact, but also from Golden Era, which is Mpact’s competitor, major customer, co-accused in a cartel case which has been under investigation by the Competition Commission since 2016, and more recently a 10 percent shareholder in Mpact.
Mpact CEO Bruce Strong had told investors at a recent results presentation that despite attempts to engage with Caxton to understand its reasons for voting down non-executive director remuneration, Mpact’s board had been unable to find common ground with Caxton, because Caxton’s “conduct is underpinned by a different motive”.
Mpact’s annual meeting notes on non-executive pay state that a benchmark exercise was conducted and it was found that the non-executive director fees paid were in line with the market, and an inflationary increase of 4 percent was proposed.
Caxton non-executive chairperson Paul Jenkins said in a statement that Mpact’s board had not complied with its fiduciary duties – it had allegedly failed to disclose adequate details of the pending cartel case to shareholders and the risks, notwithstanding that Mpact had admitted, he said, to operating a long-standing cartel with New Era, a subsidiary of Golden Era.
Caxton alleged the Mpact board had also failed to disclose publicly all the material risks of a potential Caxton merger, in Mpact’s 2021 integrated annual report risk matrix.
“In soliciting support from Golden Era to oppose a possible Caxton merger, the Mpact board has filed secret representations and affidavits before the Competition Commission and Tribunal, thereby exacerbating concerns held by Caxton that Mpact and Golden Era remain involved in the vestiges of their long-standing cartel,” Caxton said.
“By order of the Tribunal, this Mpact secret information had recently been disclosed on a restricted basis to the Caxton chairman only, who now considers that the Mpact board has also failed in its duty to disclose material price sensitive information to all Mpact shareholders,” said Jenkins.
Mpact management this weekend declined to comment on the issues raised by Caxton.
Mpact’s board had displayed “gross misjudgement,” he claimed.
“Caxton is seeking legal advice as to remedies ... against the Mpact board and potential reporting of its conduct to the JSE for investigation,” a statement said.
“Caxton remains committed to engaging with the Mpact board, and will be able to do so more meaningfully once Mpact has provided Caxton and all other shareholders with access to the secret information it is clearly so reluctant to disclose,” said Jenkins.
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