RE: Phronimos11 Apr 2019 10:28
Dear Fellow Polo Resources Shareholder,
Despite numerous attempts to resolve matters amicably, the Board and management of Polo Resources have not complied with our requests for:
The shareholder register (which we have a statutory right to inspect under section 100 of the BVI Business Companies Act);
An explanation regarding the appropriateness of Chairman Michael Tang’s ~$2 million annual total remuneration; and
The time frame deemed necessary by the Board to evaluate any shareholder value unlocking proposals currently being contemplated.
We firmly believe the underlying value in Polo is significantly higher than the current share price and that the stubborn adherence to the Board's current investment policy is detrimental to the interests of shareholders as a whole. The market’s lack of faith in the stated investment policy is evidenced by the greater than 70% discount of Polo’s share price to its Net Asset Value (“NAV”) per share. The persistently large discount of Polo’s share price to net asset value precludes shareholders from realizing anything remotely close to its fair value through open-market transactions. The status-quo, which has resulted in significant realized and unrealized losses for past and present shareholders of Polo, is unacceptable.
We believe there will be broad shareholder support for a substantial cash distribution or share buyback if the proposal to return capital were put to a vote at a requisitioned meeting of the shareholders of Polo. Consequently, in preparation for requisitioning a shareholder meeting for a vote on our proposals (none of which are board control seeking) to unlock value via a significant buyback or distribution and improve corporate governance via the appointment of a shareholder representative to the Board, we'll need each concerned shareholder to provide us with confirmation of:
the number of Polo Resources shares held and owned by you
confirmation that you can exercise the voting rights on the above-mentioned shares (Yes Or No will suffice); and
the name and address of the Broker and Nominee account in which the shares are actually held (if not in paper form).
Please note that you will likely have to contact your account manager or liaison at your broker/custodian to obtain the name of the nominee/registered shareholder. Your written confirmation is critical to our efforts to requisition a shareholder meeting, so please make every effort to provide the requested information as soon as possible. If any aspect of this message is unclear, please feel free to call me.
Thank you for your support.
Best Regards,
Sam John, CFA
Managing Member
Phronimos Capital, LLC
sjohn@phronimoscap.com
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