Before the market open this morning TNG Limited announced the addition on a non-executive director (NED) based in London.
For abundant clarity, the s249d notice that we served to TNG on 20 July preempts such a scenario. Resolution 3 states:
"That, pursuant to section 203D(1) of the Corporations Act 2001 (Cth), any person appointed as a director of the Company on and from 18 July 2022 until the commencement of the general meeting at which this resolution is passed be removed as a director of the Company with effect from the end of the general meeting of the Company at which this resolution is passed."
I also reviewed a potential response that involves shareholder dilution, as retrograde a step as that would be. I note here that in last year's AGM the resolution seeking a 10% placement did not carry. Additionally, TNG raised $12.5m late last year, announced on 9 Nov 2021 (here). This largely expends the 15% annual placement capacity available to TNG under ASX listing Rule 7.1. Given the strong cash position at 30 June 2022 of $14.4 million, I see no need for TNG to use the small remaining capacity available to it.
I reviewed these areas given the persistent shareholder concerns regarding TNG's governance, and the lack of alignment between the compensation structure of Mr Burton and Mr Elkington and shareholder interests. This theme has predominated in many exchanges I have had this week with shareholders, small and large. I will say more on this in due course.
Without commenting on the proposed Director specifically, I highlight the following section from our Members' Statement:
The Shareholders are taking these steps to ensure the Board has improved independence and alignment, and augmented with expertise, in order to deliver better outcomes for all stakeholders. A clean transition from the micro-board structure that is currently in place necessitates the removal of both the current Chairman and Managing Director.
The appointment of a London-based NED during a 249D action does not address the concerns held on governance at TNG. It illustrates the point.
The Board that I will build out will prioritise independence, experience, profile, complementarity and, importantly, will be based here in Australia.
Improved governance is key to the long term success of TNG, and is fundamental to the new era ahead.
Proposed Chair of TNG Limited