Notice of Extraordinary General Meeting
Notice of Extraordinary General Meeting of Shareholders
GRAND CAYMAN, CAYMAN ISLANDS--(June 13, 2017) - Tethys Petroleum Limited ("Tethys" or the "Company") (TSX:TPL) HEREBY GIVES NOTICE THAT an extraordinary general meeting (the "Meeting") of the holders of ordinary shares of the Company will be held at the offices of Borden Ladner Gervais LLP, Bay Adelaide Centre, East Tower, 22 Adelaide St W, Toronto, ON, M5H 4E3, Canada on July 28, 2017 at 11:00 a.m. (Eastern Daylight Time - local time in Toronto, Canada).
The Meeting has been convened pursuant to a Member's requisition made by Olisol Petroleum Limited ("Olisol") in accordance with Regulation 35(B) of the Articles of Association of the Company for the following purposes:
Resolutions 1.1 to 1.4 - Removal of Directors
To propose each of the following separate resolutions as ordinary resolutions of the Company, the removal of which shall take effect from the conclusion of the Meeting if the resolutions are approved:
1.1 to remove William P. Wells as a director of the Company;
1.2 to remove Medgat Kumar as a director of the Company;
1.3 to remove Adeola Ogunsemi as a director of the Company; and
1.4 to remove any person who became a director between May 23, 2017 and the date of the Meeting,
all as more particularly described and set forth in the management information circular of the Company to be mailed to shareholders (the "Circular").
Resolutions 2.1 to 2.5 - Appointment of Directors
To propose each of the following separate resolutions as ordinary resolutions of the Company, the appointment of which shall take effect from the conclusion of the Meeting if the resolutions are approved:
2.1 to elect Piers Johnson as a director of the Company;
2.2 to elect Bill Roberts as a director of the Company;
2.3 to elect Robert James Nash as a director of the Company;
2.4 to elect Vladimir Griguletsky as a director of the Company; and
2.5 if resolution 1.1 is approved, that a person to be nominated by Pope Asset Management (not being William P. Wells or Kenneth May) be appointed as a director of the Company,
all as more particularly described and set forth in the Circular.
Management and the Board of Directors will oppose the resolutions and management will be soliciting votes against all of the proposed resolutions.
The details of all matters proposed to be put before shareholders at the Meeting will be set forth in the Circular. At the Meeting, shareholders will be asked to vote on the resolutions, all as more particularly described in the Circular. To be approved, each resolution must be approved by a majority of the votes attached to the ordinary shares held by shareholders present in person or by proxy at the Meeting. Apart from Resolution 2.5, which is conditional on the approval of Resolution 1.1, the resolutions are not conditional on each other, so any or all of the resolutions may be approved even if the others are not.
Only shareholders of record as of June 28, 2017, the record date, will be entitled to receive notice of the Meeting and to attend and vote at the Meeting. Each outstanding ordinary share will entitle the holder thereof, as of the record date, to one vote at the Meeting.
Resolutions Excluded from the Business of the Meeting
Olisol also requested that the following resolutions be included in the business of the Meeting, however, the Board of Directors, following receipt of legal advice, does not regard these proposed resolutions as being appropriate matters for decision by the shareholders and those resolutions have therefore been properly excluded from the notice of the Meeting for the reasons set out below.
3.1 Resolution to re-list on the London Stock Exchange
This is a matter for decision by the Board of Directors of the Company. The Board decided to apply to the United Kingdom Listing Authority ("UKLA") to cancel the standard listing of the Company's ordinary shares (the "Shares") from the Official List of the UKLA and the cancellation of trading in the Shares on the Main Market of the London Stock Exchange (together, the "Cancellation"), following a determination by the Company, and after taking legal advice, that the costs of maintaining a dual listing on the London and Toronto stock exchanges was unnecessarily expensive for a company of Tethys' size and that following the Cancellation, the Shares would continue to trade on the Toronto Stock Exchange which should provide shareholders with liquidity and places sufficient corporate governance requirements upon the Company. Further, the Company's conclusion, that the London listing be cancelled, was supported by the limited trading and liquidity of the Shares on the London Stock Exchange (meaning that limited benefit was brought by that listing).
3.2 The Board of Directors to report to the shareholders on the performance of the Company and provide details of commercial contracts
The Company complies with Canadian securities laws and relevant accounting rules in disclosing material information. The information being sought by Olisol is already required to be disclosed by those laws and accounting rules or is confidential in nature and not appropriate (or required) for disclosure and not a matter for shareholders to vote on. Further, as previously disclosed, on January 26, 2017 Tethys and each of its Kazakhstan subsidiaries commenced legal action against Olisol, Olisol Investments Limited, Eurasia Gas Group LLP ("EGG") (a company affiliated with Olisol) and certain of their respective principals in the Court of Queen's Bench of Alberta. The legal action was to seek, among other things, damages arising from failure to meet contractual obligations under an Investment Agreement and damages arising from unlawful interference with Tethys' business activities, including issuing erroneous press release information about Tethys as alleged. Tethys intends to enforce its rights and legitimate interests to the fullest extent permitted by law, to protect its shareholders, investors, assets, investments, management and employees.
3.3 The Board of Directors be authorised to remove Kenneth May as Chief Executive Officer
This is a decision for the Board of Directors and the current board supports Kenneth May in his role as Chief Executive Officer. If a new board is elected, they can determine what changes to the management of the Company they feel are appropriate.
3.4 The Board of Directors of the Company shall take all necessary steps to cause the Company's indirect subsidiary, TethysAralGas LLP, to comply in all respects with the terms of the joint venture agreement between it, Eurasia Gas Group LLP, and Aral Oil Terminal LLP dated March 26, 2012
The Company does not believe there is a valid agreement between the parties referred to above. The Aral Oil Terminal LLP ("AOT") is a joint venture between Olisol Investments Limited, the parent company of Olisol, and a Tethys subsidiary, Transcontinental Oil Transportation SPRL. The General Director of the AOT is Alexander Skripka. Mr. Skripka is also the owner of EGG. He is also a joint owner and Director of Olisol and he is the representative who signed the Member's requisition on behalf of Olisol. TethysAralGas LLP ("TAG") formerly sold oil to EGG under an oil sales agreement. Legal title to the oil passed to EGG when it took delivery of the oil at the wellsite. EGG was responsible for transportation and used trucks to transport the oil to the AOT where it was loaded to rail cars. EGG paid a fee to the AOT for oil transshipment services. Accordingly, there was previously a contractual relationship between TAG and EGG for the sale of oil and a separate unrelated contractual relationship between EGG and the AOT for oil transshipment services. There is no contractual relationship, or indeed any requirement for a contractual relationship, between TAG and the AOT since legal title for oil sold by TAG passes to EGG at the wellsite. As there is no joint venture between TAG, EGG and AOT, there is no aspect of the relationship between TAG, EGG and AOT to be placed before shareholders at the Meeting.
3.5 Revocation and rescission of resolutions passed at the Extraordinary General Meeting of the Company held on January 27, 2017
The January meeting was properly constituted and held and voted on by shareholders, so it is not open to revote on the matter.
3.6 Directors to report to shareholders on nature and status of criminal proceedings against management of the Company's indirect subsidiary, TethysAralGas LLP
As previously disclosed, the proceedings referred to were initiated by Alexander Abramov, the former co-Chairman of Tethys and a joint owner of Olisol, in his capacity as Chairman of the Company but without consultation with, or approval by, the rest of the Board of Directors. Mr. Abramov was removed from the Board by a majority vote and in accordance with the Company's Articles of Association. As previously disclosed, the Board believes the allegations were improperly made and led to a raid on the Company's offices in Kazakhstan by armed law enforcement officers, the seizure of computer equipment and records and the interrogation of employees. The Company has been notified by its legal adviser of an official ruling by the Kazakh authorities that the proceedings have now been cancelled due to a lack of evidence.