PROTO RESOURCES & INVESTMENTS LTD
26th May 2015
Inosite Limited
238 Stirling Highway
Claremont
WA 6010
Mark Wells
PO Box 335
Launceston
Tas 7250
Phillip Siu
Tianjin Tai Jiang International Trade Co (Australia) Pty Ltd
Suite 405, 74 Pitt Street
Sydney
NSW, 2000
Dear Scott, Steve, Phillip and Mark,
Section 249D Notice - Proto Resources and Investments Ltd (Proto)
We refer to the Requisition Notice pursuant to section 249D of the Corporations Act signed by each of you ("Notice").
We the undersigned directors of Proto submit, following receipt of legal advice, that the
Notice is defective and invalid for the following reasons:
1. Inosite Ltd was not registered as a shareholder of Proto at the time the Notice was signed by it. Consequently the requisite percentage of shareholding required under section 249D(1)(a) of the Corporations Act 2001 (Cth) (Act) has not been satisfied.
2. There is no explanatory memorandum to the Notice and as a result Proto's shareholders will not have sufficient information to make an informed decision about the 14 resolutions proposed in the Notice. This clearly is in breach of section 249L(1)(B), the Listing Rules and common law principles. Clearly there are matters to be proposed at the meeting dealing with related party transactions which have not been properly disclosed and addressed as required by law.
3. The board of Proto did not consider or approve the issue of the Notice. This is despite the reference to the Notice being called under section 249D of the Act
Proto Resources & Investments Ltd Unit 2, 70 Shaw Street P: +61 2 8249 8283
ACN: 108 507 517 Beaconsfield, Tas, Australia 7270
which must be called by Proto's board under that section. We note the Notice is unsigned and undated and has not been authorised or issued by Proto's board. The Notice is a clear misrepresentation of the facts.
4. The Notice contravenes the Joint Venture Agreement between Inosite, Tianjin Tai Jiang International Trade Co (Australia) Pty Ltd and Superstructure International Operations Group Pty Ltd dated 21 August 2014.
5. The procedure under Section 203D of the Act has not been complied with.
6. The period of notice prescribed by section 249HA of the Act has not been complied with. We note that the Notice was issued on or about 15 May 2015 and the return date is 10 June 2015 which is less than the statutory period.
7. There has been no notification of the issue of the Notice provided to the ASX.
8. The Notice is in breach of section 249Q on the basis that it has not been called for a proper purpose. In particular, those resolutions numbered 12-14 whilst ambiguous appear in any event to be management matters for the Board. It is clear that the intent of the Notice is to harass those directors of Proto who are the subject of proposed resolutions 1-4.
9. The Notice contains errors. For example, on the first page of the Notice it states the meeting is to be held on 5 June 2015 at 11 am, while elsewhere it states the meeting will be held at 10 June at 10am.
We are of the view that the proposed resolutions are not in the interests of Proto or its shareholders. It appears that Inosite, being a related party of Proto, is seeking to further its position over Proto without due notice to Proto's shareholders.
In light of the above summary, we request that you immediately withdraw the Notice and inform the ASX of such withdrawal by 5pm (Sydney Time) this Thursday 28 May
2015. If the Notice is not withdrawn by this time, we shall take such legal remedies available to us, including the seeking of injunctive relief.
Please note that we intend to claim all costs incurred by us in respect of this matter against Proto in accordance with our respective Deeds of Indemnity with Proto.
Yours faithfully
Benjamin Cooper
on behalf of - Andrew Mortimer, Lia Darby, Benjamin Cooper and Andrew Heap
As directors of Proto Resources & Investments Ltd
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