The EC-Hold board has responded to shareholders` disgruntlement by tasking Deloitte & Touche with the review of all the transactions between EC-Hold and parent MGX Holdings since 1999.
EC-Hold shareholders met again yesterday after an earlier meeting was adjourned. The meeting was called by minorities Cycad Financial Holdings and Peregrine, which together own about 6.5% of EC-Hold.
Among other things, the requisitioning shareholders had requested that minority shareholders be allowed to vote on the proposed appointment of PricewaterhouseCoopers to conduct a forensic audit and investigation, the disclosure of the rationale and details of an investment with parent MGX Holdings, and the particulars of dealings between EC-Hold and MGX during the period between 11 October 1999 and 27 June 2003.
Other resolutions include a proposal for future proceedings by EC-Hold against MGX and a proposal for future proceedings by EC-Hold against current and former EC-Hold directors relative to any investment of surplus funds with MGX. The core issue is an R11.9 million loan EC-Hold made to MGX.
"In the interests of transparency, the board of directors of MGX Holdings and the EC-Hold Board wish to clear any possible suspicion that may have been caused by the unsubstantiated allegations implicit in the resolutions proposed at the general meeting," EC-Hold directors say in a report on the meeting.
"Accordingly, the EC-Hold board has requested Deloitte & Touche, its new auditors, to review all the transactions between EC-Hold and MGX since 1999, including certain specific matters, which the company has agreed to include in the review at the request of the requisitioning shareholders."
Shareholders are to meet again on 16 October.
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