DataMirror has asked the Securities Regulatory Panel (SRP) to probe alleged concert party actions by certain Idion directors.
DataMirror general counsel Greg Dee said after Idion`s annual general meeting this morning that a formal letter had been sent to the SRP.
He said that should the SRP find there was concert party activity, an offer to minorities at 185c a share could be enforced.
"If the SRP rules on that we would consider selling our stake in Idion. We would regard that as unsuccessful because we did seek control of the company, but it would not be an unhappy outcome."
Idion CEO Nicolaas Vlok said the allegations "are a figment of DataMirror`s imagination. We are aware they are pursuing that, but we believe it is an alternative exit strategy so they can get out at a better price."
During the AGM, Dee asked for and received confirmation from the company that no corporate funds were used to pay for employees` share purchases, saying that in at least one instance the purchase of a large number of shares involved a big sum for an employee.
DataMirror, which owns 36.9% of Idion, voted in favour of only one of the resolutions proposed at the AGM. That resolution was to pay R125 000 to non-executive directors.
The group abstained from voting on a resolution to accept the company`s financial statements, but challenged accounting policies and banking arrangements, among other things.
It voted against all other ordinary resolutions which dealt with the reappointment of directors, placing the unauthorised share capital under control of directors and a general authority to issue shares for cash.
As the resolution allowing the issue of shares for cash was subject to approval from shareholders representing 75% of Idion`s shares, it was not passed. All other ordinary resolutions were adopted.
DataMirror also blocked two special resolutions, the first allowing the company to repurchase shares and the second updating the articles of association to allow for electronic communication and online proxy voting.
Vlok said it was clear from the meeting that DataMirror`s aim was not to act in the interest of shareholders but to frustrate the business of the company, an accusation chairman Phillip McDonald also levelled at Dee during the AGM.
"We deny allegations that we don`t have the interest of the company in mind," Dee said. "As long as we are a shareholder we want the company to perform well.
"And as long as we are a shareholder we will remain an activist shareholder. We will make our views known and try to influence the company to perform the best it can and adopt good corporate governance."
During the meeting Dee requested that DataMirror be represented on the Idion board, which Idion management rejected immediately on the grounds that DataMirror was a competitor.
Other shareholders expressed frustration with the lengthy challenges made by Dee to the various resolutions.
One shareholder, Johan Augustyn, said DataMirror`s offer to buy Idion shares was unconditional and yet it was still raising various issues. He said this was to frustrate the company and other shareholders.
Dion Nothard, of institutional investor Metropolitan, said Metropolitan viewed DataMirror`s viewpoint as not being in the interest of all shareholders.
"We are concerned that the value of our shareholding could be impacted by these actions and the costs of defending them. I have never seen such an aggressive and antagonistic bid before," he told the meeting. "We see value in the company and intend to remain invested in the company."
Vlok said afterwards the outcome of the AGM was in line with his expectations. While the blocking of the resolutions would not affect Idion`s business, it could make some things cumbersome.
"We are in a wait-and-see position," Dee said. "We could sell our stake or gain control. What happens there depends on what management does, the performance of the company and the market in general.
"August 6, when they release their results, is a very important date, and we will watch carefully."
Share
