30th Jun 2014 12:50
LONDON (Alliance News) - China-focused private equity investor Origo Partners PLC Monday said it has received a second complaint from Brooks Macdonald Group PLC, as the dispute over the convertible, zero dividend preference shares issued by Origo in March 2011 rumbles on.
The second complaint comes after Brooks Macdonald earlier this month called for Origo to sell its assets over time and return the proceeds to investors, in a move it claimed was unconnected to the dispute over the convertibles. Origo had said in February that Brooks Macdonald had raised a complaint over the terms of the convertible, zero-dividend preference shares. At the time, Origo said that any legal proceedings by Brooks Macdonald would be unlikely to succeed.
Brooks Macdonald, which holds both convertible zero dividend preference shares and ordinary shares in Origo, has previously said that the way certain terms in documents related to the matter were detailed by Origo on February 7 "gives investors an inaccurate understanding of [the] nature of that document." The two companies are in dispute about whether the convertibles should be converted into shares or if their holders should have the option of whether they can be redeemed instead in the case of a change of control in Origo.
According to Origo, Brooks Macdonald has now complained that a resolution passed on March 8, 2011, to amend the company's article in relation to the creation of the financial instruments was not validly passed. Origo said that Brooks Macdonald's lawyers have argued that a so-called 75% resolution, which was required to amend the articles, requires a majority of holders of 75% of all Origo's shares to have voted in favour of it, as opposed to the majority of 75% of the votes cast.
Brooks Macdonald was not immediately available for comment.
"Brooks Macdonald, therefore, contends that if the March 2011 Resolution was not validly passed it would have a legal claim for the return from the company of the consideration paid for the purchase of the CPSs," Origo said in a statement.
"The company is firmly of the view that there is no substance to the second complaint, and that the March 2011 resolution was validly passed. The company has taken legal advice which supports this position," Origo added, though it added that Brooks Macdonald has not initiated legal proceedings over either of its complaints.
Origo said that Brooks Macdonald has refused a direct request to withdraw the second complaint.
"Therefore, the company has issued an application in the Isle of Man Court for a declaration that the articles bear the meaning propounded by the company. The company is seeking to have this application dealt with on an expedited basis in order to remove any uncertainty as to the operation of its articles as quickly as possible," Origo said, though it noted that it is "committed to attempting to work with Brooks Macdonald" in order to find a resolution to the dispute.
The convertible preference shares were acquired by Brooks Macdonald upon its purchase of Spearpoint Ltd, now known as Brooks Macdonald Asset Management (International) Ltd, in November 2012.
Origo Partners shares were last quoted at 7.76 pence Monday, down 1.4%. Brooks Macdonald shares were down 1.2% at 1,545.45p.
By Samuel Agini; [email protected]; @samuelagini
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