- Shareholder group calls for board changes
- Letter expresses ‘deep concerns’ over management
- Statements over Samsung settlement called ‘misleading’
A group of shareholders at Manchester-based materials technology company Nanoco (NANO) are making public a letter they sent to the board on 10 March expressing deep concerns over ‘certain actions and activities’.
The group of shareholders is led by Tariq Hamoodi who holds an interest of over 4.23%, along with minority shareholders Richard Griffiths (investing related investment vehicles) and Lombard Odier.
Shares in Nanoco were down 2% to 20p in early trading in response to this shareholder activism.
RADIO SILENCE FROM NANOCO
The reason for the Nanoco shareholder group going public with their reservations is it claims it has not received an adequate response to its letter after several weeks.
‘It is therefore taking this step in order to seek to drive positive change at Nanoco’, they said in a statement.
The group's concerns centre on ‘repeated misleading statements’ about the merits of Nanoco's settlement with South Korean technology giant Samsung Electronics (005930:KRX).
In addition, the group of investors is unhappy about holders of Nanoco preferred shares ‘acting on information that was not made available to other shareholders or the market more generally, on the basis of which the preferred shareholders dumped their shares in Nanoco whilst the share price was rising on the basis of statements made or withheld about the Samsung Litigation, before it sharply fell after settlement details were published.’
The Hamoodi-led group added: ‘These concerns are non-exhaustive; our clients have numerous other concerns as to the approach of Nanoco and the preferred shareholders, which it intends to raise with other shareholders.’
SETTLEMENT WITH KOREAN FIRM
Back in January of this year, Nanoco said it had reached a settlement with Samsung Electronics following a long-running legal battle over the Korean firm's use of Nanoco's patent-protected cadmium-free quantum dot technology in its QLED TVs without permission.
Nanoco issued a statement saying: ‘A term sheet for a no-fault settlement of the current litigation has been agreed between Nanoco and Samsung.’
Nanoco’s share price jumped as much as 70% intraday to a high of 72.6p on the news of the settlement on 6 January, after analysts speculated the settlement could net Nanoco up to $500 million or £422 million in damages.
The shares finished the day 31% higher at 55.8p with more than 29 million shares traded against a maximum daily volume of just over two million shares in the weeks leading up to the announcement.
Nanoco operates a licence and royalty model which means customers pay a one-off licence fee for permission to use its technology plus a small royalty paid on each unit manufactured.
The full text of the activist shareholder group's letter can be found here.
UPDATE TO LETTER
Since the publication of this letter by the group of shareholders led by Tariq Hamoodi, the board at Nanoco has now acknowledged its contents.
The board ‘emphatically rejects the shareholder group's speculative concerns about certain actions and activities involving Nanoco,’ they said in a statement.
The directors of Nanoco added that they have ‘no intention of stepping down from the board and are confident that the board's actions and statements over the period of the Samsung litigation were in line with its corporate governance duties, obligations and standards.’
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