IsZo Capital Provides Important Update Regarding Special Meeting of Nam Tai Shareholders
March 04 2021 - 10:13AM
Business Wire
Highlights That Eastern Caribbean Supreme
Court has Ordered Nam Tai to Hold Special Meeting on April 26,
2021, Whereat Shareholders Can Vote to Reconstitute the Company’s
Board
Notes That Court has Ordered Company to Set
a Record Date of March 15, 2021
Urges Shareholders to Visit www.FixNTP.com
to Review the Court’s Judgement, Which Includes Findings Regarding
the Board’s Breach of Fiduciary Duties During the Period in Which
it Initiated the Now Voided Private Placement
IsZo Capital Management LP (together with its affiliates, “IsZo”
or “we”), which beneficially owns approximately 12.1% of the
outstanding shares of Nam Tai Property Inc. (NYSE: NTP) (“Nam Tai”
or the “Company”), today announced that the Eastern Caribbean
Supreme Court (the “Court”) has ordered the Company to convene a
meeting of shareholders (the “Special Meeting”) on April 26,
2021 and fix a record date of March 15, 2021. On
September 11, 2020, IsZo delivered to Nam Tai verified requests to
convene a Special Meeting from holders of approximately 40% of the
Company’s outstanding shares – a number far in excess of the 30%
requirement (the “Requisition”). IsZo has been seeking to convene
the Special Meeting for the purpose of providing shareholders an
opportunity to reconstitute Nam Tai’s Board of Directors (the
“Board”) by removing a majority of the incumbents and installing
six highly-qualified and independent individuals: Michael Cricenti,
Cindy Chen Delano, Bo Hu, Louis Leung, Paula J. Poskon and Jeffrey
Tuder. IsZo believes that the right leadership can help unlock the
true value of Nam Tai’s current assets, which the Company’s own
valuation estimates have suggested is up to
$40 per share.
IsZo is pleased that shareholders will finally have the
opportunity to vote to reconstitute the Board at the Special
Meeting now that the Court ruled in its favor and reached a
judgement that voids the $170 million private placement executed by
the Company on October 5, 2020. As a reminder, IsZo filed a lawsuit
in October 2020 against Nam Tai, Kaisa Group Holdings Limited’s
(HKG:1638) (“Kaisa”) wholly-owned subsidiary Greater Sail Limited
(“Kaisa-Greater Sail”) and West Ridge Investment Company Limited
(“West Ridge”) seeking to invalidate the Company’s private
placement, which had distributed more than 16 million common shares
to Kaisa-Greater Sail, taking its ownership from 23.9% to 43.9% of
the outstanding shares, and more than 2.6 million common shares to
West Ridge. IsZo believed the private placement, which was executed
after the Company received the Requisition to remove and replace
the Kaisa-affiliated directors from the Board, represented a
blatant entrenchment maneuver intended to prevent boardroom change
at the Special Meeting by significantly boosting Kaisa’s ownership
and diluting other shareholders.
It is now clear based on the Court’s findings that a majority of
the incumbent directors, including Executive Chairman Dr. Lai Ling
Tam, Dr. William Lo, Vincent Fok, Professor Si Zong Wu and
Professor Aiping Lyu, betrayed shareholders and breached their
duties when initiating the transaction. In its judgement on March
3, 2021, the Court found that:1
- “Issuing shares to Kaisa had been raised as early as 8th June,
before Dr. Tam came on the scene but also well before any problems
with the banks arose. By 16th September it was not a new topic. The
reinvestigation of it was not […] related to serious problems with
the banks, because Dr. Tam only learnt of these in the conference
call of 22nd September. I find as a fact (a) that the reason for
reviving the proposal on 16th September was the service of the
requisition on 11th September; (b) that Dr. Tam wished to prevent a
change in the board by the issuance of shares to keep de facto
control with Kaisa. His purpose was not to avert some sudden risk
of Nam Tai’s financial collapse.”
- “An example of [Dr. Lo, Mr. Fok, Prof. Wu and Prof. Lyu’s] want
of independence is the proposal approved by the board meeting on
30th April 2020 for the consideration of the general meeting of Nam
Tai in June. They approved putting Aaron Kwok forward for
appointment to the board. As I have noted above, Aaron Kwok was a
young man with no qualifications or relevant experience for
appointment to the board whatsoever —save being the son and nephew
of YC and YS Kwok respectively. The willingness of the four
directors to approve this is strong evidence in my judgment that
the four considered Nam Tai was a fiefdom of Kaisa and were happy
with that position of vassalage.”
- “The four directors [Dr. Lo, Mr. Fok, Prof. Wu and Prof. Lyu]
in evidence to me were all gushing in their praise of Kaisa. All
considered the relationship an important part of Nam Tai’s
strategy. In my judgment, whatever the formal corporate governance
status of these directors, in reality they were heavily
committed to supporting Kaisa’s de facto control of Nam Tai. I find
that the four directors were not, as a matter of fact, independent
of Kaisa.”
- “[Prof. Wu] had been a director of Nam Tai since July 2019 and
was chairman of the audit committee. It is not credible that he
was unaware of the power dynamics on the board of Nam Tai. He
accepted that in preparation for the board meeting on 5th October
he only ‘had a brief look at the [board] papers.’ He said he relied
on the call from Dr. Tam on 3rd October for his information on the
liquidity crisis and denied that he had been asked for his support.
Whether or not he had been asked expressly for support, he must in
my judgment have appreciated that Dr. Tam was expecting him to vote
for the PIPE. Prof. Wu was an experienced director. I find as a
fact that he knew a vote for the PIPE would give de facto control
of Nam Tai to Kaisa.”
- “I turn first to Dr. Lo. He was a highly intelligent man. He
must have been well aware of Nam Tai’s case in these proceedings on
the purpose of the PIPE and (as the re-examination shows) the
difference in law between purpose and effect. The re-examination in
my judgment tipped him off that he had made a concession in
cross-examination which (if he was to support Nam Tai’s case) he
should not have made. In my judgment, Dr. Lo’s answers in
cross-examination are more likely to be true than the gloss put on
them in re-examination. I find as a fact that Dr. Lo’s primary
purpose in approving the PIPE was to ensure that the change in the
board proposed by the requisitionists failed.”
In light of these and other findings, we anticipate many
shareholders will be more motivated than ever to seek boardroom
change at Nam Tai. We encourage shareholders interested in
voting at the Special Meeting to get in touch with IsZo’s
solicitor, Saratoga Proxy Consulting, at info@saratogaproxy.com or
(212) 257-1311. Saratoga will help address all questions
pertaining to the Special Meeting and the voting process.
Shareholders as of the close of
business on March 15, 2021 (the “Record Date”) are eligible to
receive notice of and to vote at the Special Meeting. This means
that Thursday, March 11, 2021 is the last day to purchase shares to
vote at the Special Meeting. Please note that Nam Tai shareholders
who have loaned, pledged or hypothecated any of their shares may
not be able to vote their shares unless they are returned to their
accounts before the Record Date.
In the days and weeks to come, IsZo will be sharing additional
information about its director candidates’ collective commitment to
restoring the Board’s credibility and working to unlock the
intrinsic value of Nam Tai’s portfolio. Our goal is to communicate
with shareholders frequently ahead of the Special Meeting on April
26, 2021. Visit www.FixNTP.com for more information and to sign up
for e-mail alerts.
__________________________ 1 Emphasis added by IsZo.
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For Investors:
Saratoga Proxy Consulting LLC John Ferguson / Joe Mills,
212-257-1311 jferguson@saratogaproxy.com /
jmills@saratogaproxy.com
For Media:
Profile Greg Marose / Rachel Goun, 347-343-2999
gmarose@profileadvisors.com / rgoun@profileadvisors.com
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