Two sides hunker down at RX Exploration

A battle is brewing in the boardroom of RX Exploration (RXE-V).

Feathers began flying on May 17 when a group of four “concerned shareholders”, largely made up of managers and founders of the company, issued their own proxy to remove RX’s chairman of the board and other key directors.

The dissidents claim that one of the key reasons for their maneuver is Chairman John O’Donnell questionable business integrity.

In response to the proxy the board issued a release saying that the upcoming shareholders meeting – originally scheduled for June 7 – will be postponed until July 26.

In the statement O’Donnell says the delay is necessary because the dissidents issued their circular without warning, and since some of those same dissidents were on the ballot, more time is needed to remove them and find four other candidates.

The chairman also said the dissident circular came only six days after the board unanimously approved and issued management information circular.

“…the dissident directors acted disingenuously by participating in the review and approval of the RXE management information circular, and by permitting themselves to serve as management nominees, while at the same time knowing that they would be launching a dissident proxy fight to remove certain management nominees,” O’Donnell went on to say.

Not surprisingly, the dissidents lashed out at the current board for its decision to postpone the meeting.

“This outrageous action by the Board serves only to entrench their interests, disenfranchise and subvert the will of shareholders. In the face of already overwhelming support for the concerned shareholder nominees, the board’s latest desperate action, demonstrates their utter disregard for the basic principles of shareholder democracy,” the dissidents wrote.

The dissidents are made up of Bob Bannerman, Mike Gunsinger, Murray Nye and Max Polinsky who collectively own 5.26% of the company.

In the dissident proxy, issued on May 17, the group laid out some of their specific concerns with O’Donnell and other members of the current board.

The statement alleges that O’Donnell, who also serves as legal council for the company, issued invoices to the company for $700,000.

According to the proxy, shortly after CFO Max Polinsky confronted O’Donnell about the merit of some of those expenses, he was relieved of his duties.

The dissident’s argue that the company would be better served by having independent legal council.

The proxy also points a finger at another current director, Paul Teodorovici. The proxy alleges that Teodorovici has been tied to three companies hat have either filed for insolvency protection or been de-listed, and that his track record was not fully disclosed to RX shareholders.

The dissidents say if their slate is elected to the board they will focus on generating revenues sooner by pushing ahead on gold production at the company’s key assets. It alleges that the current board would spend too much time and money on exploration.

O’Donnell’s press releases states that the forthcoming revised management information circular will contain a detailed response to the dissident proxy and called the allegations made by the dissidents “baseless.”

RXE shares were off 5% or 3¢ to 47¢ on 152,000 shares traded in Toronto on May 27.