July 25, 2017
In its reasons for the recent Eco Oro decision, the Ontario Securities Commission (OSC) criticized the Toronto Stock Exchange (TSX) for conditionally approving a private placement of shares in the context of a proxy contest, according to an article in Lexpert. As described in an Osler Update, the OSC overturned the TSX’s decision, in part because at the time of approving the private placement of shares, the TSX was unaware of, or did not absorb, the fact that Eco Oro Minerals Corp. (Eco Oro) was subject to a proxy contest and an impending shareholders’ meeting requisitioned by dissident shareholders. Alex Gorka, an associate in Osler’s Corporate Practice Group, explains why the OSC’s approach is “fairly significant.”
“I think the number one takeaway here is that the OSC is attempting to unscramble the egg,” Alex tells Lexpert. “What I mean by that is, they ordered the board of Eco Oro to take all actions needed to unwind the private placement, if shareholders tell them to do so.
“That’s relevant to the community because, while this remedy is not entirely unprecedented, it is a fairly significant new approach being taken by the OSC.”
Read more about the Eco Oro decision in Sandra Rubin’s article “OSC criticizes TSX for casual proxy tactic approval” in Lexpert.