Tenet Fintech Takes Aim At Dissident Shareholders

Tenet Fintech Group Inc. (CSE: PKK) is facing a budding takeover war against a group of shareholders proposing an alternative slate of directors for the company’s board, which includes the recently terminated former Chief Executive Officer Johnson Joseph.

In May, the tech firm announced the sudden departure of Joseph, leaving shareholders and observers bewildered that the firm’s leader since 2011 was let go with not so much as a customary “thank you for your service.” 

The board appointed Raji Wahidy as COO and acting CEO of the company. Wahidy joined the firm in January 2022, serving in the role of Vice President of Operations.

Earlier this month, a group of five longtime shareholders of Tenet who own approximately 8% of the company’s shares announced their own slate of board director nominees for the firm’s upcoming annual general meeting of shareholders on June 27. The nominees are led by Joseph, with co-founder Liang Qiu and Mayco Quiroz who “has extensive private and public company experience.”

The said shareholders–Kelong Chen, Changsheng Zhuo, Pierre Lalonde, Barbara Hickson and Joseph Zenha–claim that the current board is “responsible for the recent chaotic events that have taken place at Tenet and have eroded the company’s value.”

Tenet’s tenacity

Tenet is defending its hold of the board, castigating the so-called dissident shareholders’ own slate of director nominees. The firm put out a statement on Wednesday claiming that the proposed slate is “fundamentally flawed.”

“The slate of directors proposed by the Dissident Shareholders does not in any way comply with the stock exchange rules and regulatory requirements applicable to a senior issuer as the Board of Tenet must be constituted of a majority of independent directors and would need to include an independent chairperson,” the firm said.

The tech firm also highlighted Joseph’s involvement in the dissident shareholders’ proposed slate. According to the statement, the former CEO’s sudden termination took effect on April 28, 2023, after the independent directors completed their internal review. The review, which is still ongoing, revealed conduct on the part of Joseph that was deemed “inconsistent with his duties as an officer and director of the company, as well as a breach of the company’s policies and procedures.”

Additionally, the review found that Joseph failed to repay a promissory note totaling $72,793, including accrued interest, which was due and payable on December 15, 2022. The board had previously requested Joseph to resign his directorship, but he declined to do so.

The firm also noted that the independent directors have raised concerns about Joseph’s involvement in a market manipulation scheme, as alleged in a sworn affidavit from the AMF (Autorité des marchés financiers). They believe that Joseph’s continued presence as a director or officer would greatly impede any prospectus offering or potential up-listing of the company to an exchange.

Furthermore, Tenet reminded the public that the company has been in a continuous “black-out” period, which existed prior to the appointment of the independent directors. This black-out period prevents the independent directors from acquiring the company’s shares in the market or through their compensation arrangements. The black-out period remains in effect due to recent events at the company and the ongoing investigation by the AMF.

Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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