FEDERAL COURT OF AUSTRALIA Stratford Sun Limited v OM Holdings Limited; In the Matter of OM Holdings Limited [2011] FCA 414 Citation: Stratford Sun Limited v OM Holdings Limited; In the Matter of OM Holdings Limited [2011] FCA 414 Parties: STRATFORD SUN LIMITED v OM HOLDINGS LIMITED (ARBN 081 028 337); IN THE MATTER OF OM HOLDINGS LIMITED (ARBN 081 028 337) File number: NSD 483 of 2011 Judge: FOSTER J Date of judgment: 19 April 2011 Catchwords: CORPORATIONS – whether the defendant corporation should be restrained from putting certain resolutions to the Annual General Meeting of the defendant scheduled to occur in the immediate future – whether alleged breaches of the ASX Listing Rules, the Corporations Act 2001 (Cth) and the general law gave rise to one or more serious questions to be tried – whether the balance of convenience and justice favoured the grant or refusal of injunctive relief – injunctions refused Legislation: Corporations Act 2001 (Cth), ss 180, 181, 230, 793C, 1041H, 1101B and 1324 Cases cited: American Cyanamid Co v Ethicon Ltd [1975] AC 396; [1975] 1 All ER 504 cited Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; 185 ALR 1; 54 IPR 161; [2001] HCA 63 applied Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57; 229 ALR 457; [2006] HCA 46 applied Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; [1968] ALR 469 applied Bulfin v Bebarfalds Ltd (1938) 38 SR (NSW) 423; (1938) 55 WN (NSW) 136 cited Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148; 67 ALR 553 applied Chequepoint Securities Ltd v Claremont Petroleum NL (1986) 11 ACLR 94; (1986) 4 ACLC 711 cited Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) (1998) 195 CLR 1; 153 ALR 643; 27 ACSR 535; [1998] HCA 30 applied Shree Sanatan Dharm Sabha of NSW Inc v Satya Mani [2006] NSWSC 96 cited Stratford Sun Ltd v OM Holdings Ltd (2009) 74 ACSR 698 cited ICF Spry, The Principles of Equitable Remedies: Specific Performance, Injunctions, Rectification and Equitable Damages, 5th ed, LBC Information Services, Sydney, 1997 ICF Spry, The Principles of Equitable Remedies: Specific Performance, Injunctions, Rectification and Equitable Damages, 7th ed, Lawbook Co, 2007 Date of hearing: 19 April 2011 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 83 Counsel for the Plaintiff: Mr JB Simpkins SC, Mr TM Thawley Solicitor for the Plaintiff: Mallesons Stephen Jaques Counsel for the Defendant: Mr R Beech-Jones SC Solicitor for the Defendant: Gilbert + Tobin IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 483 of 2011 IN THE MATTER OF OM HOLDINGS LIMITED (ARBN 081 028 337) BETWEEN: STRATFORD SUN LIMITED Plaintiff AND: OM HOLDINGS LIMITED (ARBN 081 028 337) Defendant JUDGE: FOSTER J DATE OF ORDER: 19 APRIL 2011 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The plaintiff's application for urgent interlocutory injunctive relief in the terms of pars 2, 3, 4 and 5 of its Originating Process be dismissed. 2. The costs of the proceedings to date be the defendant's costs in the proceeding. BY CONSENT, THE COURT ORDERS THAT: 3. By 4.00 pm on 21 April 2011: (a) The plaintiff file and serve its fully particularised Statement of Claim; and (b) The plaintiff serve its request for documents. 4. By 4.00 pm on 28 April 2011, the plaintiff file and serve all affidavit evidence on which it will seek to rely at the final hearing of this proceeding. 5. By 4.00 pm on 2 May 2011: (a) The defendant file and serve its Defence; and (b) The defendant serve its objections to the plaintiff's request for documents. 6. By 4.00 pm on 29 April 2011, the defendant serve its List of Documents, such documents to be made available for inspection from 10.00 am on 2 May 2011. 7. By 4.00 pm on 6 May 2011, the defendant file and serve all affidavit evidence on which it will seek to rely at the final hearing of this proceeding. 8. By 12 noon on 10 May 2011, the plaintiff serve its Written Submissions. 9. By 4.00 pm on 12 May 2011, the defendant serve its Written Submissions. 10. The parties have liberty to apply on 24 hours' notice. 11. The proceeding be fixed for final hearing before Foster J at 10.15 am on 13 May 2011. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 483 of 2011 IN THE MATTER OF OM HOLDINGS LIMITED (ARBN 081 028 337) BETWEEN: STRATFORD SUN LIMITED Plaintiff AND: OM HOLDINGS LIMITED (ARBN 081 028 337) Defendant JUDGE: FOSTER J DATE: 19 APRIL 2011 PLACE: SYDNEY REASONS FOR JUDGMENT 1 The plaintiff, Stratford Sun Limited (Stratford Sun), is incorporated in the British Virgin Islands. It is an investment vehicle with its only current interest being its shareholding in the defendant, OM Holdings Limited (OMH). Stratford Sun is a wholly owned subsidiary of Consolidated Minerals Limited (CML), a company which is also incorporated in the British Virgin Islands. CML is a global investment company with a focus on steel-related raw materials, in particular manganese, through its interests in Australia and Ghana. It also has interests in chromium, tungsten, vanadium, molybdenum and base metals such as nickel, zinc and copper. 2 OMH is incorporated in Bermuda. It is a public company which is registered in Australia as a foreign company and which is listed on the Australian Stock Exchange. Its corporate head office is in Singapore. It maintains a registered office in Perth and also a share registry in Perth. It is involved in metals trading. Of principal interest to OMH is the sourcing and distribution of manganese ore products. It is also involved in processing ores into ferromanganese intermediate products. The corporate group of which it is a part operates several fully integrated commercial mining operations covering Australia, China and Singapore. OMH controls the Bootu Creek Manganese Mine which is located 110 km north of Tennant Creek in the Northern Territory. That mine is a significant mine for the production of manganese. OMH also has interests in mining corporations which operate in South Africa, Sweden and Norway. 3 Stratford Sun holds approximately 11.4% of the issued capital of OMH. They are competitors in the manganese mining industry. 4 By Notice of Meeting dated 24 March 2011 (the Notice of Meeting) which was despatched to its shareholders on that day, OMH gave notice of its Annual General Meeting proposed to be held at 10.30 am at its corporate head office in Singapore on Wednesday, 20 April 2011. By an announcement made to ASX Limited (the ASX) dated 28 March 2011, the market was informed of the fact that the Notice of Meeting had been issued. The ASX was provided with a copy of the Notice of Meeting at the same time. I shall return to the detail of the Notice of Meeting later in these Reasons. For present purposes it is sufficient to note that, in the Notice of Meeting, OMH informed its shareholders that 11 resolutions would be put to them at the upcoming Annual General Meeting (the AGM). By proposed Resolution 6, which is of central importance in the present proceeding, the shareholders of OMH are being asked to authorise the directors of OMH to issue up to a total of 345,000,000 new fully paid ordinary shares in the capital of OMH at an issue price which is yet to be determined but which will be at a price not less than 80% of the volume weighted average market price of OMH shares trading on the ASX over the last five days on which the sales in OMH shares were recorded before the date on which the offer price is fixed for the purpose of the Global Offering (as defined) and in accordance with the terms and conditions set out in the Explanatory Statement attached to the Notice of Meeting (the Explanatory Statement). The issue of new shares is to be effected in conjunction with the proposed dual listing of OMH on the Hong Kong Stock Exchange (the HKSE). OMH intends to raise new capital of between AUD406,000,000 and AUD498,000,000 by the new issue. Other resolutions concerning a new employee share option plan and amendments to the Bye-Laws of OMH were also proposed. In large part these additional resolutions are dependent upon the passing of the resolution concerning the issue of the additional 345,000,000 shares in OMH. The resolution by which the Bye-Laws of OMH are to be amended must be passed as a special resolution. 5 The present application is an application for urgent interim injunctive relief restraining OMH from submitting certain of the resolutions proposed in the Notice of Meeting to the shareholders at the AGM. Of primary significance to Stratford Sun is Resolution 6 which is the resolution concerning the issue of the additional 345,000,000 shares. 6 The proceeding was commenced yesterday afternoon when Stratford Sun made an application to the Corporations Duty Judge for orders abridging the time for service of its Originating Process and the affidavit in support of that Process and for an order fixing its claim for interlocutory relief for hearing at the earliest possible opportunity. The Court accommodated Stratford Sun's application and the matter was fixed for hearing before me today. The Relevant Principles (Interlocutory Injunctions) 7 In Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; 185 ALR 1; 54 IPR 161; [2001] HCA 63, a majority of the High Court held that, where an interlocutory injunction is sought (inter alia) in respect of private rights, it is necessary to identify the legal or equitable rights which are to be determined at the trial and in respect of which the final relief is sought. Their Honours who comprised the majority in that case made clear that the final relief sought need not be injunctive in nature: see at [8]–[21] per Gleeson CJ; at [59]–[61] per Gaudron J; and at [86]–[92]; [98]–[100]; and [105] per Gummow and Hayne JJ. At [10], Gleeson CJ also specifically cited with approval ICF Spry, The Principles of Equitable Remedies: Specific Performance, Injunctions, Rectification and Equitable Damages, 5th ed, LBC Information Services, Sydney, 1997, pp 446–56. 8 In his reasons for judgment, at [13], Gleeson CJ expressly approved the following passage from the reasons for judgment of Mason ACJ in Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 153; 67 ALR 553 at 557: In order to secure such an injunction the plaintiff must show (1) that there is a serious question to be tried or that the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief; (2) that he will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted; and (3) that the balance of convenience favours the granting of an injunction. 9 These remarks of Mason ACJ which were approved by Gleeson CJ echo the observations made by the High Court in Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 622–3; [1968] ALR 469 at 470–1. 10 In Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57; 229 ALR 457; [2006] HCA 46 at [65], when referring to the well-known passage in Beecham at CLR 622–3; ALR 470–1, Gummow and Hayne JJ said: By using the phrase "prima facie case", their Honours did not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. That this was the sense in which the Court was referring to the notion of a prima facie case is apparent from an observation to that effect made by Kitto J in the course of argument [(1968) 118 CLR 618 at 620 ; [1968] ALR 469 at 470]. With reference to the first inquiry, the Court continued, in a statement of central importance for this appeal [(1968) 118 CLR 618 at 622; [1968] ALR 469 at 470]: "How strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks." 11 In O'Neill at [70]–[72], their Honours went on to explain the similarities and differences between the test expounded in Beecham and the test articulated in American Cyanamid Co v Ethicon Ltd [1975] AC 396; [1975] 1 All ER 504 as follows (at [70]–[72]): 70 When Beecham and American Cyanamid are read with an understanding of the issues for determination and an appreciation of the similarity in outcome, much of the assumed disparity in principle between them loses its force. There is then no objection to the use of the phrase "serious question" if it is understood as conveying the notion that the seriousness of the question, like the strength of the probability referred to in Beecham, depends upon the considerations emphasised in Beecham. 71 However, a difference between this Court in Beecham and the House of Lords in American Cyanamid lies in the apparent statement by Lord Diplock that, provided the court is satisfied that the plaintiff's claim is not frivolous or vexatious, then there will be a serious question to be tried and this will be sufficient. The critical statement by his Lordship is "[t]he court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried" [[1975] AC 396 at 407]. That was followed by a proposition which appears to reverse matters of onus [[1975] AC 396 at 408]: "So unless the material available to the court at the hearing of the application for an interlocutory injunction fails to disclose that the plaintiff has any real prospect of succeeding in his claim for a permanent injunction at the trial, the court should go on to consider whether the balance of convenience lies in favour of granting or refusing the interlocutory relief that is sought." Those statements do not accord with the doctrine in this Court as established by Beecham and should not be followed. They obscure the governing consideration that the requisite strength of the probability of ultimate success depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory order sought. 72 The second of these matters, the reference to practical consequences, is illustrated by the particular considerations which arise where the grant or refusal of an interlocutory injunction in effect would dispose of the action finally in favour of whichever party succeeded on that application [See the judgment of McLelland J in Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 at 535–536; 11 ACLR 630 at 632–4 and the article by Sofronoff, "Interlocutory Injunctions Having Final Effect", Australian Law Journal, vol 61 (1987) 341.95]. The first consideration mentioned in Beecham, the nature of the rights asserted by the plaintiff, redirects attention to the present appeal. [Emphasis added.] 12 In the present case, Stratford Sun seeks interlocutory relief in respect of its private rights. In order to obtain the relief which it seeks, it must, therefore, identify the legal or equitable rights which are to be determined at the trial and in respect of which the final relief is sought. 13 No Statement of Claim has yet been filed by Stratford Sun. In order to assess and determine Stratford Sun's claim for interlocutory relief, the Court must have regard to the final relief claimed in the Originating Process and the submissions put on behalf of Stratford Sun which explain the case which it will put at the trial. 14 Stratford Sun will contend at the final hearing that, by proposing Resolutions 6, 7, 8, 9 and 10, OMH breached the ASX Listing Rules (in particular Rule 7.3). It will also contend that, by authorising the despatch of the Notice of Meeting, the directors of OMH breached the duties owed by them to OMH as directors. These duties are both statutory (s 180 and s 181 of the Corporations Act 2001 (Cth) (the Act)) and fiduciary. 15 The declaratory and injunctive relief which Stratford Sun claims is claimed pursuant to ss 793C, 1041H, 1101B and 1324 of the Act. It contends that it will be entitled to a direction from the Court pursuant to s 793C about compliance with, or enforcement of, the ASX Listing Rules (s 793C(2)) and other relief pursuant to the combined operation of s 793C and s 1101B of the Act. It also relies upon s 1041H (Misleading or Deceptive Conduct (etc) in relation to a financial product or a financial service) and the general power of the Court to grant injunctions pursuant to s 1324 of the Act. 16 The remaining questions identified by Mason ACJ in Castlemaine require Stratford Sun to show that: (a) it will suffer irreparable injury for which damages will not be adequate compensation unless an injunction is granted; and (b) the balance of convenience and the balance of justice favour the granting of an injunction. 17 The first of these matters involves an assessment by the Court as to whether the claimant would, in all material respects, be in as good a position if he were confined to his damages remedy, as he would be in if an injunction were granted: see the discussion of this aspect in ICF Spry, The Principles of Equitable Remedies: Specific Performance, Injunctions, Rectification and Equitable Damages, 7th ed, Lawbook Co, 2007, pp 383–9; 397–9 and 457–62. 18 The second of these matters requires the Court to exercise a discretion. 19 In exercising that discretion, the Court is required to assess and compare the prejudice and hardship likely to be suffered by the defendant, third persons and the public generally if an injunction is granted, with that which is likely to be suffered by the claimant if no injunction is granted. In determining this question, the Court must make an assessment of the likelihood that the final relief (if granted) will adequately compensate the claimant for the continuing breaches which will have occurred between the date of the interlocutory hearing and the date when final relief might be expected to be granted. 20 In order to address the irreparable injury question, the balance of convenience and the balance of justice in the present case, it is necessary to consider the nature and strength of Stratford Sun's case and the circumstances in which the AGM was convened. 21 It is also necessary to consider and evaluate the impact that the grant or refusal of an injunction will have or is likely to have on third persons and, if relevant, the public generally. 22 In Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) (1998) 195 CLR 1; 153 ALR 643; 27 ACSR 535; [1998] HCA 30 at [65] and [66], Brennan CJ and McHugh, Gummow, Kirby and Hayne JJ, in a joint judgment, expressly adopted a passage from Spry, 1997, pp 402–3, which may be summarised as follows: (a) In assessing the balance of convenience in an interlocutory injunction application, the interests of the public and third persons are relevant and have more or less weight according to other material circumstances; (b) Whether those interests tend to favour the grant or the refusal of an injunction in any given case depends upon the circumstances of that case; and (c) Hardship visited upon third persons or the public generally by the grant of an interlocutory injunction will rarely be decisive. 23 In the present case, I must assess and compare the prejudice and hardship likely to be suffered by OMH, any affected third parties and, if relevant, the public generally, if injunctions are granted with that which is likely to be suffered by Stratford Sun, other shareholders in OMH and, if relevant, the public generally if no injunction is granted. In determining these matters, I must make an assessment of the likelihood that the final relief, if granted, will adequately compensate and protect those affected by the alleged wrongful conduct for any continuing consequences of that conduct which may occur between today's date and the date when final relief might be expected to be granted. 24 In proceedings brought by a shareholder to restrain the holding of a general meeting or to restrain the putting of particular resolutions to such a meeting, there may once have been a bias in favour of the Court not interfering on an interlocutory basis in the conduct of the meeting prior to its being held. The general preference of the Court was not to restrain the deliberations of shareholders at properly convened meetings but rather to allow those shareholders to consider and decide upon matters put to them even in circumstances where it is being suggested by a plaintiff shareholder that the putting of those resolutions might be unlawful. The Court generally took the view that, except in the clearest of cases, it was more desirable to ascertain the will of the meeting before considering whether to interfere in the deliberations of the meeting. This was the approach discussed in Bulfin v Bebarfalds Ltd (1938) 38 SR (NSW) 423; (1938) 55 WN (NSW) 136 and taken in many subsequent cases. 25 Senior Counsel for Stratford Sun submitted that, in recent times, there may have been a weakening of that bias. He referred to Chequepoint Securities Ltd v Claremont Petroleum NL (1986) 11 ACLR 94; (1986) 4 ACLC 711 and Shree Sanatan Dharm Sabha of NSW Inc v Satya Mani [2006] NSWSC 96 as illustrations of his point. Senior Counsel may well be correct. However, I do not need to come to a firm view as to whether the law has shifted as he suggested because I intend to approach the present application upon the basis that the ordinary principles applicable to the grant of interlocutory injunctive relief apply. Those principles are those which I have summarised at [7]–[23] above. The Notice of Meeting 26 The Notice of Meeting specifies the following resolutions as Resolutions 6 to 9: RESOLUTION 6 – APPROVAL FOR THE ISSUE OF SECURITIES – HKSE LISTING To consider and if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution: "That, for the purposes of Listing Rule 7.1 and for all other purposes, and in conjunction with the proposed dual listing of the Company on the Main Board of The Stock Exchange of Hong Kong Limited ("HKSE"), the Directors be authorised to issue up to a total of 345,000,000 Shares at an issue price yet to be determined but that will not be less than 80% of the volume weighted average market price of Shares trading on the ASX over the last 5 days on which sales in the Shares were recorded before the date on which the offer price is fixed for the purpose of the Global Offering and in accordance with the terms and conditions as set out in the Explanatory Statement." The Company will disregard any votes cast on Resolution 6 by any person who may participate in the proposed issue and any person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary shares if Resolution 6 is passed, or any associate of those persons. However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or if it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides. RESOLUTION 7 – APPROVAL OF NEW EMPLOYEE SHARE OPTION PLAN To consider and if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution: "That, subject to Resolutions 6 and 8 being passed, pursuant to and in accordance with clause 14 of the rules of the Company's employee incentive option scheme for employees and directors known as "OM Holdings Limited Employee Share Option Plan Rules" ("Existing Plan") and for all other purposes, the Company approves the amendments to the Existing Plan as set out in the Explanatory Statement (including Annexure B to the Explanatory Statement) ("New Plan"), becoming effective upon the commencement of trading of the shares of the Company on the HKSE, at which time no further Options shall be offered or granted under the Existing Plan." RESOLUTION 8 – APPROVAL OF NEW EMPLOYEE SHARE OPTION PLAN PURSUANT TO LISTING RULE 7.2, EXCEPTION 9 To consider and if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution: "That, subject to Resolution 7 being passed and New Plan becoming effective in accordance with its terms, pursuant to and in accordance with Listing Rule 7.2, Exception 9 and for all other purposes, the Company approves the issue of securities under the New Plan, the rules of which are the amended rules included in Annexure B to the Explanatory Statement, as an exception to Listing Rule 7.1." The Company will disregard any votes cast on Resolution 8 by a Director of the Company and any person associated with those persons. However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or if it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides. RESOLUTION 9 – APPROVAL OF EXISTING EMPLOYEE SHARE OPTION PLAN PURSUANT TO LISTING RULE 7.2, EXCEPTION 9 To consider and if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution "That, subject to Resolutions 6 and 7 not being passed, pursuant to and in accordance with Listing Rule 7.2, Exception 9 and for all other purposes, the Company approves the issue of securities under the Existing Plan, the rules of which are the unamended rules included in Annexure A to the Explanatory Statement, as an exception to Listing Rule 7.1." The Company will disregard any votes cast on Resolution 9 by a Director of the Company and any person associated with those persons. However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides. 27 Resolution 10 proposes certain amendments to the Bye-laws of OMH. These amendments are necessary before OMH can be listed on the HKSE. Those which are of present significance are those proposed in paragraphs 3 and 4 which relate to Bye-Laws 52AA.1A and 52AAA.32A. The proposed resolutions are as follows: To consider and if thought fit, to pass, with or without amendment, the following Resolution as a special resolution: "That, pursuant to and in accordance with Bye-Law 168 of the Company's Bye-Laws, the Bye-Laws are amended as follows: 3. Bye-law 52AA.1A By adding the following new Bye-law 52AA.1A: "Subject to the listing of the Company on the Stock Exchange of Hong Kong Limited, all proportional takeover bids shall be conditional upon the requirements of The Securities and Futures Commission of Hong Kong as required under The Codes on Takeovers and Mergers and Share Repurchases in Hong Kong." 4. Bye-law 52AAA.32A By adding the following new Bye-law 52AAA.32A: "Subject to the listing of the Company on the Stock Exchange of Hong Kong Limited, all takeover bids shall be conditional upon the requirements of The Securities and Futures Commission of Hong Kong as required under The Codes on Takeovers and Mergers and Share Repurchases in Hong Kong." 28 In the Explanatory Statement, in respect of Resolution 6 the following is said: Resolution 6 – Approval for the Issue of Securities – HKSE Listing Purpose Resolution 6 has been included so that Shareholders may consider and approve pursuant to Listing Rule 7.1 of the ASX Listing Rules ("Listing Rules") the proposed issue of up to a maximum of 345,000,000 Shares ("Offer Shares") in connection with the Company's proposed listing on Main Board of The Stock Exchange of Hong Kong Limited ("HKSE"). The Company presently has on issue 503,085,150 Shares. The maximum issue of the Offer Shares pursuant to this Resolution will represent approximately 40.7% of the expanded issued capital of the Company (on an undiluted basis) and assuming the maximum number of Shares will be issued (including Shares issued pursuant to the exercise of an over-allotment option referred to below). The Company is required to seek Shareholder approval for any issue of securities greater than 15% of its issued capital pursuant to Listing Rule 7.1 of the ASX Listing Rules. Background On 23 November 2010 the Company announced that it would be pursuing a proposed secondary listing on the HKSE. Since that time, the Company has decided to apply for a dual listing of its Shares on the HKSE. The Company has appointed CITIC Securities Corporate Finance (HK) Limited (being a subsidiary of CITIC Securities International Company Limited, "CSI") as its sponsor for the proposed global offering and proposed dual listing which is anticipated to occur no later than early in the 30 September 2011 quarter ("Global Offering"). The Global Offering will comprise an international placing of Offer Shares by the Company outside the United States of America (including to institutional and professional investors and excluding retail investors in Hong Kong) and a public offering of Offer Shares to the public in Hong Kong. The Company may also extend the international placing to the Company's existing institutional and professional investors based in Australia who qualify as professional and/or sophisticated investors under the Australian Corporations Act 2011 [sic]. The Global Offering is expected to be fully underwritten. Offer Shares may also be issued pursuant to the exercise of an over-allotment option that is expected to be granted by the Company to the Joint Global Coordinators (CSI and Morgan Stanley Asia Limited), exercisable by them, on behalf of the international underwriters, which will if granted require the Company to allot and issue up to approximately 15% of the number of Offer Shares initially available under the international placing and Hong Kong public offering pursuant to the Global Offering at the same offer price solely to cover over-allocations in the international placing, (if any)). The Company is in the process of preparing a Global Offering prospectus to be published solely in connection with the Hong Kong public offering, which forms part of the Global Offering. The listing application and other relevant documentation for the Global Offering was lodged with the HKSE on 28 February 2011. Subject to, amongst other things, the approval by the HKSE and registration of the Global Offering prospectus with the Hong Kong regulatory authorities, the Company is expecting to complete the listing no later than early in the 30 September 2011 quarter. HKSE Listing Hong Kong is one of the leading global stock exchanges in the world with an impressive diversified and stable investor base from overseas and local investment communities. The key benefits attributable to OMH pursuing such capital raising initiatives with a dual listing on the HKSE include: • enhanced access to capital markets which have an understanding of the OMH Group's businesses and growth strategies; • gateway exposure to Mainland China; • ability to leverage on Mainland China's continued growth; and • free flow of capital and information. The HKSE is a global exchange and as at February 2011 was the 7th largest exchange in the world by domestic market capitalisation and the 3rd largest exchange in Asia. In 2010 initial public offerings on the HKSE exceeded US$57 billion. The Company considers that the dual listing on HKSE will further broaden the Company's Shareholder base internationally and give the Company access to future capital raising opportunities in the growing Asian market to support its longer term growth strategy. In addition, being strategically positioned in this well established and highly liquid market will be of significant benefit to the Company should it contemplate future international acquisitions and/or growth opportunities. OMH Group's established manganese operation in Australia, combined with its ferro alloy production capability in China and trading operations based in Singapore are considered to be an attractive investment opportunity for the Hong Kong investor market. In addition, the OMH Group's growth strategy remains focussed on developing the Tshipi Project in South Africa and executing its smelting and sintering development and operational plans in Johor Bahru and Sarawak, Malaysia. The Company expects to maintain its listing on ASX and if the dual listing proceeds on the HKSE, the Company's shares may be shunted between ASX and HKSE and tradeable on either exchange. Use of Net Proceeds As at the date of this Notice of Meeting, and subject to finalisation of the Global Offering prospectus to be issued by the Company, the Company expects to use the net proceeds from the Global Offering which may range from A$406 million to A$498 million dependent upon the issue price (yet to be determined) and assuming the 300 million Shares will be issued) as follows: (a) for planned capital expansion works including the OMH Group's share of the capital expenditure requirements associated with the Tshipi Project in South Africa and construction of manganese ore sintering and alloy smelting plants in Johor Bahru, Malaysia and potential project opportunity in Sarawak, Malaysia; (b) fund the identification, evaluation and capture of strategically suitable projects – including suitable mining rights, operating assets or companies holding such rights and/or operating assets; (c) repayment and/or restructuring of the Groups' existing short and long term bank borrowings to reduce business and financial risk and provide improved financial flexibility; and (d) execution of planned exploration programs and the identification, evaluation and capture of strategically suitable exploration opportunities. As outlined above, the Company also intends to offer an over-allotment option to the Joint Global Coordinator (comprising an additional 45 million Shares), the additional proceeds of which, if exercised, will be used towards enhancing the funding for the evaluation and assessment of other international projects and as general working capital for the Company. Information Requirements The information required to be given to Shareholders pursuant to Listing Rule 7.3 of the Listing Rules is set out below: (a) The Company proposes to issue up to 345,000,000 Shares (including the over-allotment option) to persons selected by the Joint Global Coordinators in consultation with the Directors in their absolute discretion and in accordance with the proposed Global Offering prospectus. (b) Any Offer Shares issued pursuant to Resolution 6 will be issued on or before 31 August 2011, pursuant to a waiver given by the ASX in relation to the requirements of Listing Rule 7.3.2 of the Listing Rules. (c) Any Offer Shares issued pursuant to Resolution 6 must be issued at a price that will not be less than 80% of the volume weighted average market price for the Shares over the last 5 days on which sales were recorded before the date the price is fixed and is announced to the market. The actual offer price is expected to be determined by the Company in consultation with the Joint Global Coordinators, on behalf of the underwriters, on the price determination date following a "book-building" process. In determining the offer price, the Directors and the Joint Global Coordinators will take into consideration, among other factors, the demand for the Global Offering, the prevailing market price of the Shares on the ASX on the last trading day before the price determination date and the interest of existing Shareholders. (d) The proposed allottees of the Shares are not known at this stage. The basis of allotment will be determined by the Joint Global Coordinators in consultation with the Directors in their absolute discretion. The proposed allottees will be determined after receiving applications to subscribe for Shares from public and professional investors in Hong Kong and other international investors arising from the Company's offering of Shares in connection with the proposed dual listing of the Company's Shares on the HKSE. (e) Any Offer Shares issued pursuant to Resolution 6 will rank pari passu with the existing Shares on the issue. (f) Subject to the final size of the Global Offering being determined, the intended use of the net proceeds are outlined in the above section titled "Use of Net Proceeds". (g) The Company will seek permission from the ASX Limited for official quotation of the Shares to be issued pursuant to Resolution 6. The Board of Directors unanimously recommend that Shareholders vote to approve Resolution 6. 29 I will not extract the material from the Explanatory Statement which deals with Resolutions 7, 8 and 9 as, in essence, the restraint which is sought on a temporary basis in respect of those resolutions is based upon the simple proposition that they must stand or fall with Resolution 6. 30 In the Explanatory Statement, the following is said in respect of Bye-Laws 52AA.1A and 52AAA.32A: 3. Bye-law 52AA.1 A By adding the following new Bye-law 52AA.1A: "Subject to the listing of the Company on the Stock Exchange of Hong Kong Limited, all proportional takeover bids shall be conditional upon the requirements of The Securities and Futures Commission of Hong Kong as required under The Codes on Takeovers and Mergers and Share Repurchases in Hong Kong." The inclusion of Bye-law 52AA.1A amends the Company's Bye Laws to be compliant with the proportional takeover provisions under The Codes on Takeovers and Mergers and Share Repurchases in Hong Kong. 4. Bye-law 52AAA.32A By adding the following new Bye-law 52AAA.32A: "Subject to the listing of the Company on the Stock Exchange of Hong Kong Limited, all takeover bids shall be conditional upon the requirements of The Securities and Futures Commission of Hong Kong as required under The Codes on Takeovers and Mergers and Share Repurchases in Hong Kong." The inclusion of Bye-law 52AAA.1A amends the Company's Bye Laws to be compliant with the takeover provisions under The Codes on Takeovers and Mergers and Share Repurchases in Hong Kong. The Relief Sought by Stratford Sun 31 In its Originating Process, Stratford Sun seeks the following final relief: Application for urgent injunctive relief restraining the Defendant from submitting certain resolutions to a meeting of its members convened for 20 April 2011 (Meeting), pursuant to the notice of meeting circulated to shareholders on or about 28 March 2011 (Notice). On the grounds stated in the accompanying affidavit, the Plaintiff claims: 1 A declaration that the notice of meeting and accompanying documents circulated to shareholders of the Defendant on or about 28 March 2011, do not constitute a valid notice of the Meeting. 2 An order restraining the Defendant from submitting to the Meeting any resolution for the approval of the issue of securities on the Stock Exchange of Hong Kong Limited pursuant to the Notice, being resolution 6 of the Notice. 3 An order restraining the Defendant from submitting to the Meeting any resolution for the approval of the new employee share option plan pursuant to the Notice, being resolution 7 of the Notice. 4 An order restraining the Defendant from submitting to the Meeting any resolution for the approval of the new employee share option plan pursuant to the Australian Securities Exchange Listing Rule (Listing Rule) 7.2, exception 9, pursuant to the Notice, being resolution 8 of the Notice. 5 An order restraining the Defendant from submitting to the Meeting any resolution for the approval of the amendment to the Defendant's bye-laws [sic] pursuant to the Notice, being resolution 10 of the Notice. 6 A declaration that only those persons who will not participate in the proposed share issue are entitled to vote in respect of resolution 6. 7 An order restraining the Defendant from issuing shares pursuant to the proposed share issue to any person (or any associate of such a person) who voted in favour of resolution 6 or granted a proxy to any person permitting or requiring that person to vote in favour of resolution 6. 8 Costs. 9 Such further or other orders as the Court thinks fit. 32 By way of urgent interlocutory relief Stratford Sun claims interlocutory injunctions in the terms of paragraphs 2, 3, 4 and 5 of its Originating Process. In its Originating Process, Stanford Sun relies upon ss 793C, 1041H, 1101B and 1324 of the Act and the inherent jurisdiction of the Court. Stratford Sun will also rely in due course upon ss 180, 181 and 230 of the Act as well as the general law concerning the fiduciary duties of directors. For the purposes of the present application, Stratford Sun concentrated on s 793C and s 1101B of the Act. The Relevant Legislative Provisions 33 Sections 793C and 1101B of the Act are in the following terms: 793C Enforcement of operating rules (1) If a person who is under an obligation to comply with or enforce any of a licensed market's operating rules fails to meet that obligation, an application to the Court may be made by: (a) ASIC; or (b) the licensee; or (c) the operator of a clearing and settlement facility with which the licensee has clearing and settlement arrangements; or (d) a person aggrieved by the failure. (2) After giving an opportunity to be heard to the applicant and the person against whom the order is sought, the Court may make an order giving directions to: (a) the person against whom the order is sought; or (b) if that person is a body corporate—the directors of the body corporate; about compliance with, or enforcement of, the operating rules. (3) For the purposes of this section, a body corporate that is, with its acquiescence, included in the official list of a licensed market, or an associate of such a body corporate, is taken to be under an obligation to comply with the operating rules of that market to the extent to which those rules purport to apply to the body corporate or associate. (4) For the purposes of this section, if a disclosing entity that is an undertaking to which interests in a registered scheme relate is, with the responsible entity's acquiescence, included in the official list of a licensed market, the responsible entity, or an associate of the responsible entity, is taken to be under an obligation to comply with the operating rules of that market to the extent to which those rules purport to apply to the responsible entity or associate. (5) For the purposes of this section, if a body corporate fails to comply with or enforce provisions of the operating rules of a licensed market, a person who holds financial products of the body corporate that are able to be traded on the market is taken to be a person aggrieved by the failure. (6) There may be other circumstances in which a person may be aggrieved by a failure for the purposes of this section. … 1101B Power of Court to make certain orders Court's power to make orders in relation to certain contraventions (1) The Court may make such order, or orders, as it thinks fit if: (a) on the application of ASIC, it appears to the Court that a person: (i) has contravened a provision of this Chapter, or any other law relating to dealing in financial products or providing financial services; or (ii) has contravened a condition of an Australian market licence, Australian CS facility licence or Australian financial services licence; or (iii) has contravened a provision of the operating rules, or the compensation rules (if any), of a licensed market or of the operating rules of a licensed CS facility; or (v) has contravened a condition on an exemption from the requirement to hold an Australian market licence or an Australian CS facility licence; or (vi) is about to do an act with respect to dealing in financial products or providing a financial service that, if done, would be such a contravention; or (b) on the application of a market licensee, it appears to the Court that a person has contravened the operating rules, or the compensation rules (if any), of a licensed market operated by the licensee; or (c) on the application of a CS facility licensee, it appears to the Court that a person has contravened a provision of the operating rules of a licensed CS facility operated by the licensee; or (d) on the application of a person aggrieved by an alleged contravention by another person of subsection 798H(1) (complying with market integrity rules) or a provision of the operating rules, or the compensation rules (if any), of a licensed market, it appears to the Court that: (i) the other person did contravene the provision; and (ii) the applicant is aggrieved by the contravention. However, the Court can only make such an order if the Court is satisfied that the order would not unfairly prejudice any person. Note: For examples of orders the Court could make, see subsection (4). (2) For the purposes of paragraph (1)(d), if a body corporate contravenes a provision of the operating rules of a licensed market, a person who holds financial products of the body corporate that are able to be traded on the licensed market is taken to be a person aggrieved by the contravention. (3) Subsection (2) does not limit the circumstances in which a person may be aggrieved by a contravention for the purposes of paragraph (1)(d). Examples of orders the Court may make (4) Without limiting subsection (1), some examples of orders the Court may make under subsection (1) include: (a) an order restraining a person from carrying on a business, or doing an act or classes of acts, in relation to financial products or financial services, if the person has persistently contravened, or is continuing to contravene: (i) a provision or provisions of this Chapter; or (ii) a provision or provisions of any other law relating to dealing in financial products or providing financial services; or (iii) a condition on an Australian market licence, Australian CS facility licence or Australian financial services licence; or (v) a condition of an exemption from a requirement to hold an Australian market licence or Australian CS facility licence; or (vi) a provision of the operating rules, or the compensation rules (if any), of a licensed market or of the operating rules of a licensed CS facility; or (b) an order giving directions about complying with the market integrity rules or a provision of the operating rules, or the compensation rules (if any), of a licensed market or of the operating rules of a licensed CS facility to a person (or the directors of the body corporate, if the person is a body corporate) who contravened the provision; and (c) an order requiring a person to disclose to the public or to specified persons, in accordance with the order, specified information that the person to whom the order is directed possesses or to which that person has access, if the person: (i) contravened the market integrity rules or a provision of the operating rules of a licensed market or a condition relating to the disclosure or provision of information; or (ii) was involved in such a contravention; and (d) an order requiring a person to publish advertisements in accordance with the order at that person's expense, if the person: (i) contravened the market integrity rules or a provision of the operating rules of a licensed market, or a condition relating to the disclosure or provision of information; or (ii) was involved in such a contravention; and (e) an order restraining a person from acquiring, disposing of or otherwise dealing with any financial products that are specified in the order; and (f) an order restraining a person from providing any financial services that are specified in the order; and (g) an order appointing a receiver of property (see subsection (9)) of a financial services licensee; and (h) an order declaring a contract relating to financial products or financial services to be void or voidable; and (i) an order directing a person to do or refrain from doing a specified act, if that order is for the purpose of securing compliance with any other order under this section; and (j) any ancillary order considered to be just and reasonable in consequence of the making of an order under any of the preceding provisions of this subsection. Interim orders (5) Before considering an application to the Court under subsection (1), the Court may make an interim order of the kind applied for to apply pending the determination of the application, if in the opinion of the Court it is desirable to do so. (6) However, if ASIC, a market licensee or a CS facility licensee applies for an order under subsection (1), the Court must not require the applicant, or any other person, to give any undertakings as to damages as a condition of making an interim order under subsection (5). Power to give notice of applications (7) Before making an order under subsection (1), the Court may do either or both of the following: (a) direct that notice of the application be given to such persons as it thinks fit; (b) direct that notice of the application be published in such manner as it thinks fit. Powers of receivers appointed under Court orders (8) A person appointed by order of the Court under subsection (1) as a receiver of the property (see subsection (12)) of a financial services licensee: (a) may require the financial services licensee to: (i) deliver to the person any property of which the person has been appointed receiver; or (ii) give to the person all information concerning that property that may reasonably be required; and (b) may acquire and take possession of any property of which the person has been appointed receiver; and (c) may deal with any property that the person has acquired, or of which the person has taken possession, in any way in which the financial services licensee might lawfully have dealt with the property; and (d) has such other powers in respect of the property as the Court specifies in the order. Duty to comply with order (10) A person must not, without reasonable excuse, contravene: (a) an order under this section; or (b) a requirement imposed under paragraph (8)(a) or (8)(d) by a receiver appointed by order of the Court under subsection (1). Note: Failure to comply with this subsection is an offence (see subsection 1311(1)). Power to rescind or vary order (11) The Court may rescind or vary an order made by it under this section or suspend the operation of such an order. (12) In this section: compensation rules has the same meaning as in Part 7.5. property, in relation to a financial services licensee, includes: (a) money; or (b) financial products; or (c) documents of title to financial products; or (d) other property; entrusted to, or received on behalf of, any other person by the financial services licensee or another person in the course of, or in connection with, a financial services business carried on by the financial services licensee. 34 Stratford Sun is an "aggrieved person" within the meaning of that expression in s 793C(1)(d) and s 1101B(1)(d) of the Act. The ASX Listing Rules are "operating rules" within the meaning of that expression in s 793C and s 1101B of the Act. Section 1101B gives the Court wide powers to remedy a breach of the ASX Listing Rules, subject to the proviso which appears at the end of s 1101B(1). Rule 7.3 of the ASX Listing Rules 35 Rule 7.3 of the ASX Listing Rules is in the following terms: Notice requirements for approval under rule 7.1 and 7.1.5 (a) 7.3 For the holders of +ordinary securities to approve an issue or agreement to issue, the notice of meeting must include each of the following. 7.3.1 The maximum number of +securities the entity is to issue (if known) or the formula for calculating the number of +securities the entity is to issue. Introduced: 1/7/96. Origin: Listing Rule 3E(6)(e)(i). Amended 1/7/2000. 7.3.2 The date by which the entity will issue the +securities. The date must be no later than 3 months after the date of the meeting. However, if court approval of a reorganisation of capital (in the case of a trust, interests) is required before the issue, the date must be no later than 3 months after the date of court approval. Introduced: 1/7/96. Origin: Listing Rule 3E(6)(e)(ii).Cross reference: chapter 10. If the issue requires approval under chapter 10, the time limit under that chapter for issue of the securities must be complied with. 7.3.3 The issue price of the +securities, which must be either: • a fixed price; or Introduced: 1/7/96. Origin: Listing Rule 3E(6)(e)(iii)a. • a minimum price. The minimum price may be fixed or a stated percentage that is at least 80% of the average +market price for +securities in that +class. The average is calculated over the last 5 days on which sales in the +securities were recorded before the day on which the issue was made or, if there is a prospectus, Product Disclosure Statement or offer information statement relating to the issue, over the last 5 days on which sales in the +securities were recorded before the date the prospectus, Product Disclosure Statement or offer information statement is signed. Introduced 1/7/96. Origin: Listing Rule 3E(6)(e)(iii)b. Amended 117/97, 13/3/2000, 11/3/2002. 7.3.4 The names of the allottees (if known) or the basis upon which allottees will be identified or selected. Introduced: 1/7/96. Origin: Listing Rule 3E(6)(e)(iv). ). Amended 30/9/2001. 7.3.5 The terms of the +securities. Introduced: 1/7/96. Origin: Listing Rule 3E(6)(e)(v). 7.3.6 The intended use of the funds raised. Introduced: 117/96. Origin: Listing Rule 3E(6)(e)(vi). 7.3.7 The dates of allotment or a statement that allotment will occur progressively. Introduced: 1/7196. Origin: Listing Rule 7.3.8 A +voting exclusion statement. This does not apply if security holders are to receive a priority entitlement as part of a public offer and the notice of meeting states each of the following. (a) The priority entitlement is at least 10% of the offer or in another way, in ASX's opinion, that is fair in all the circumstances. (b) The entity will limit the number of +securities it issues to a holder of ordinary securities to the higher of 5% of all the +securities being offered under the priority entitlement and the number the holder would be entitled to under a +pro rata issue of all those +securities. Introduced 1/7196. Origin; Listing Rule 3E(6)(e)(viii). Amended 31/3/2004. 7.3.9 In the case of an agreement for the allotment of +securities which is part of a public offer, a +voting exclusion statement in relation to a party to the agreement, and an adequate summary of the agreement. Introduced 1/7/96. Origin; Listing Rule 3E(6)(e)(viii). The Relevant Facts 36 After Stratford Sun received the Notice of Meeting, CML sent a letter dated 5 April 2011 to OMH in which it sought certain assurances concerning the prospect that some of the 345,000,000 new shares might be issued to the directors of OMH or associates or related corporations of those persons. The letter did not contain any threat of litigation nor did it articulate any of the complaints now made by Stratford Sun 37 The letter of 5 April 2011 was followed by an email sent on 7 April 2011. In that email, the author said: We have now had the opportunity fully to read the notice of AGM and explanatory statement of last week. It leaves us with many questions. 38 The author went on to articulate concerns that neither the Notice of Meeting nor the Explanatory Statement which accompanied it provided any indication or specification of the likely profile of OMH's Share Register after the new raising was complete. It raised other issues, including the prospect that Stratford Sun's interest in OMH would be severely diluted by the new issue. It sought answers on an urgent basis to matters raised in an attachment to the email. That attachment has not been tendered in evidence before me. 39 On 8 April 2011, a further letter was written by CML in which a number of matters concerning the proposed resolutions to be put at the AGM were raised. The general complaint was that the disclosure made by OMH in the Notice of Meeting and Explanatory Statement was insufficient and, to use the words of the author of the letter, "completely lacking". The letter went on: The AGM Notice appears to treat the proposed new issue and listing to be a very minor corporate step to be taken by OMH that warrants very little discussion or explanation to OMH shareholders. OMH shareholders were informed of the company's plans to seek a dual listing on the HKSE (as opposed to a secondary listing) for the first time in the AGM Notice, Other than a 4-point skeletal summary of the generic benefits of the listing, the AGM Notice does not address any potential risks and costs that OMH be subject to as a result of the listing. Given the size of the proposed dilution to OMH shareholders' interest and the fact that this listing would subject OMH and its shareholders to a brand new regulatory regime, OMH owes its shareholders a duty to explain properly and in reasonable detail what OMH's listing plans entail and what the potential benefits and costs are for all parties involved. At the moment, the AGM Notice appears to assume all OMH shareholders would be familiar with the listing process and ongoing regulatory regime in Hong Kong. Without taking away from the overall deficiency of disclosure of the AGM Notice, the following are examples of the specific types of information and level of details that warrant further disclosure to be given by OMH: • Resolution 10 – Blanket statements made in relation to proposed amendments to OMH's constitution – In relation to the proposed insertion of Bye-laws 52AA.1A and 52AAA.32A, we note that these are nothing more than blanket statements requiring the provisions relating to proportional takeover bids and takeover bids in the Bye-laws to be subject to the requirements of the Securities and Futures Commission ("SFC") under The Codes on Takeovers and Mergers and Share Repurchases in Hong Kong ("Hong Kong Takeovers Code"). Without knowing what those requirements are, it is impossible for OMH shareholders to form a view as to whether these proposed amendments would be in the interest of OMH or its shareholders. Without even offering shareholders that basic level of assurance, it seems impossible for shareholders to make any informed decision on whether these amendments should be approved. • Resolution 11 – Approval for renewal of the proportional takeover provisions in Bye-law 52AA – We note that under this resolution, OMH is asking shareholders to approve the renewal of the proportional takeover provisions in the Bye-laws, subject to the proposed amendment noted in Resolution 10 as discussed above. Again, we believe it is impossible for shareholders to make an informed decision on this resolution without knowing the scope of the applicable Hong Kong Takeovers Code requirements that would apply if the Hong Kong Listing proceeds. • Conflicting takeover regimes – Furthermore, it is also unclear to us as to why OMH has decided to retain the provisions on proportional takeover bids and takeover bids in its Byelaws, but make them subject to the requirements of the Hong Kong Takeovers Code. This raises the obvious question as to how OMH envisages the two regimes will interact with each other and what happens if there are conflicts between the two sets of requirements. This is not addressed at all in the AGM Notice. The issue is clearly material. OMH sought special approvals on an urgent basis 3 years ago to insert Bye-laws 52AA to 52AAA. The interaction must therefore require detailed disclosure. • Change from secondary listing to dual listing – We note in the AGM Notice that OMH has decided to seek a dual listing on the HKSE instead of the originally proposed secondary listing. The AGM Notice, however, is silent on the rationale behind the change of plans. With a dual listing structure, we assume that OMH will then be equally subject to the regulatory requirements of the HKSE, the SFC and ASX. Again, the AGM Notice falls to address this and does not disclose any information on which bodies, if any, will be the primary regulator of the company's affairs post listing. To the extent that OMH may be subject to more onerous requirements as a result of the dual listing, we believe it is important that this be disclosed to shareholders. These additional requirements could have significant impact on the operations and business of the company. Furthermore, nowhere in the information provided to OMH shareholders is there any mention of the additional costs that OMH would incur as a result of seeking and maintaining a listing of its shares on the HKSE. For instance, would OMH need to devote significant resources to regulatory compliance going forward? What may be some of the Implications on the business activities of OMH? (Depending on the type and size of a proposed business transaction, it may trigger certain legal/regulatory hurdles under the Hong Kong regime. Compliance with these hurdles could very well increase the costs of entering into the transaction.) • Change to shareholding structure – As noted in our previous correspondence with you, there is currently very minimal disclosure on the likely shareholding structure of OMH post the Hong Kong Listing. Information such as the relative size of the international placing and the Hong Kong retail offering, the ability of existing OMH shareholders to participate to retain their pro-rata interest in OMH, the types of "institutional and professional investors" that may be targeted as new shareholders of OMH, the expected size of the free float post-listing, etc., is not discussed at all in the AGM Notice. This information is crucial to any shareholder's decision on how to vote on the proposal. Given the size of the proposed new issue and OMH shareholders not being given any formal guaranteed pro-rate entitlement to any part of these shares, there is a real possibility that the nature of the shareholding base of OMH could substantially change at listing (and more likely shortly after listing when punters exit the stock after any initial gain in the share price). Not only could this affect the liquidity and trading of OMH shares, if any sizeable stake would be given to a new Investor, this could affect the future direction of OMH's operations and business strategy, As a substantial shareholder of OMH, any significant change in these aspects would have a major and potentially negative impact on our investment in CMH and the investment of other shareholders. • Lack of information on additional obligations that may be imposed on OMH shareholders – As mentioned above, there is currently no disclosure on what additional regulatory requirements may be imposed on OMH as a result of this listing. Furthermore, and more critically for us, the AGM Notice does not provide any explanation as to what additional regulatory requirements or other obligations or costs may be imposed on OMH's shareholders as a result of the Hong Kong Listing. For example, what filings will need to be made by OMH shareholders under the Hong Kong legal regime? Will substantial shareholder notices need to be filed under the relevant Hong Kong regime and if so, when will the obligation arise and what will be the timeframe within which the filing must be done? Also, we note in the AGM Notice that if the dual listing proceeds, OMH's shares may be shunted between ASX and the HKSE and tradeable on either exchange. We understand that the transfer of securities for companies listed in Hong Kong may attract Hong Kong stamp duty in certain circumstances. In the case of a Bermudan company listed on the HKSE, we understand that it is usual market practice for a branch register to be kept in Hong Kong. A transfer of shares kept on this register would, absent any special arrangements, attract Hong Kong stamp duty. It has not been made clear to date whether by listing on the HKSE, under what circumstances, if any, would a transfer of OMH shares attract Hong Kong stamp duty. This would be relevant information that OMH shareholders would need to know to assess whether OMH shares could indeed, in practice, be shunted between the 2 exchanges without incurring substantial costs. The relative costs of transferring shares have the potential to impact the relative "liquidity" of the shares on the respective exchanges. Again, none of these pertinent issues are discussed in the AGM Notice and it reinforces our position noted above that OMH appears to have taken the view that OMH shareholders are fully knowledgeable of the regulatory regime and legal landscape in Hong Kong. As we have advised in our previous correspondence and evident from the points noted above, it is our view that the AGM Notice does not contain sufficient information for us, or other shareholders to make an informed view on how to vote the resolutions on the proposed Hong Kong Listing. If OMH were to proceed with holding the AGM to consider these resolutions without providing its shareholders with any additional information, we would question the validity of any resolution passed on this basis. As a substantial shareholder in OMH and a party whose interests will be significantly affected by the proposed dilution associated with the dual listing, we ask that OMH provide us and the other shareholders with supplementary information that will address the points noted above no later than 9.00 am (London time) next Tuesday, 13 April. Given the AGM is scheduled to be held on 20 April, the requested deadline is critical so OMH shareholders have adequate time to digest the information before being asked to vote at the meeting. OMH may need to consider if a postponement of the AGM is warranted in these circumstances if this disclosure is not made by that time. In relation to the other requests for information noted in our previous correspondence with you, we do not believe that we have received any satisfactory response from you and would again ask that you provide us with such information as soon as possible. We look forward to hearing from you. Glenn Baldwin Consolidated Minerals Limited 40 For some reason, that letter did not reach OMH until 13 April 2011. I presume that the letter took so long to reach OMH because it had been sent by ordinary mail rather than by some other means. Once again, CML did not threaten litigation in this letter nor did it suggest that the Notice of Meeting and Explanatory Statement did not comply with the requirements of Rule 7.3 of the ASX Listing Rules. 41 On 13 April 2011, OMH responded in detail to the initial letter from CML dated 5 April 2011 and also to the email sent on 7 April 2011 in the following terms: Proposed Dual Listing and Issue of New Shares We refer to your letter dated 5 April 2011 and to the subsequent email dated 7 April 2011 from Mr Oleg Sheiko. We confirm the following: 1. OM Holdings Limited ("OMH" or "Company") does not intend to issue shares ("Offer Shares") under its proposed Global Offering to any of its related parties for which shareholder approval would be required under Listing Rule 10.11 or to any other person in respect of which shareholder approval would be required under OMH's Bye-laws or the ASX Listing Rules, but which has not been sought in OMH's Notice of Annual General Meeting dated 24 March 2011 ("Notice"). 2. As disclosed in the Explanatory Statement accompanying the Notice ("Explanatory Statement"), the proposed allottees under the Global Offering are not known at this stage. The basis of allotment will be determined by the Joint Global Coordinators in consultation with OMH's directors and in accordance with the terms which will be set out in the Global Offering prospectus to be issued in due course. The proposed allottees will be determined after receiving applications to subscribe for Offer Shares from public and professional investors in Hong Kong and other international investors arising from the Company's offering of Offer Shares in connection with the proposed listing of the Company's shares on the Hong Kong Stock Exchange. Such applications will be obtained during an extensive book build process, which will be structured in line with usual commercial practise for global offerings in accordance with the Company's proposed Global Offering prospectus. Our Hong Kong legal counsel has advised that in all IPOs in Hong Kong, there are publicity restrictions and this includes a requirement by the Stock Exchange that all information relating to an IPO be kept confidential until they have completed their vetting process. 3. The results of the bookbuild process cannot be determined at this point in time, and consequently we are unable to provide you with a response to your queries relating to the profile of the Company's share register or free-float post-listing on the Hong Kong Stock Exchange save that the Company will of course be in compliance with the free float requirements of the Hong Kong Stock Exchange. 4. The Explanatory Statement discloses sufficient information for shareholders to determine the dilutionary impact of the Global Offering, including the maximum number of Offer Shares that may be issued under the Global Offering (ie 345,000,000), the number of shares the Company had on issue at the date of the Notice (ie 503,085,150) and the percentage of the Company's expanded issued share capital represented by the maximum number of Offer Shares (ie 40.7%). 5. In light of the above, the Company is of the view that it has provided shareholders with all information that is currently available to it to enable shareholders to make an informed decision in relation to the proposed listing on the Hong Kong Stock Exchange. Please let us know if you have any further queries. Yours sincerely Ngee Tong Low Executive Chairman 42 On 14 April 2011, a further response was given, on this occasion to the more detailed letter sent by CML on 8 April 2011. That letter was in the following terms [attachment not reproduced]: Proposed Dual Listing and Issue of New Shares We refer to your letter dated 8 April 2011 ("Second Consmin Letter") and to our letter dated 13 April 2011 ("OMH Initial Response to the Second Consmin Letter") acknowledging receipt of the Second Consmin Letter. As set out in the OMH Initial Response to the Second Consmin Letter, we did not have sufficient time to provide you with supplementary information to address the points raised in the Second Consmin Letter within your stipulated timeframe of "Tuesday, 13 April 2011" given that we only received the Second Consmin Letter on Wednesday, 13 April 2011. We have now had an opportunity to consider the Second Consmin Letter and respond as follows. You have raised a number of issues in the Second Consmin Letter, which essentially allege that our notice of annual general meeting and explanatory statement dated 24 March 2011 ("AGM Notice") fails to provide shareholders of OM Holdings Limited ("OMH" or "Company") with key information that would be relevant in their decision-making process at the upcoming Annual General Meeting ("AGM"). We are firmly of the view, after careful consideration of the Second Consmin Letter and the First Consmin Correspondence (as defined below), that OMH has satisfied its legal obligations in relation to the disclosures it has made in the AGM Notice. Importantly, it should be noted that the regulatory authority in Australia, the Australian Securities Exchange ("ASX"), has examined the AGM Notice and has confirmed by letter dated 18 March 2011 that they have no objection to the AGM Notice in relation to compliance with the listing rules of the ASX. However, without detracting from the above position, in an endeavour to provide you with the information that you have requested in the Second Consmin Letter, set out below is our response to each of the issues raised in the bullet points in the Second Consmin Letter. We confirm that by letter dated 13 April 2011 ("OMH Response to First Consmin Correspondence") we have already responded (without further query from you) to the queries raised in your letter dated 5 April 2011 and email dated 7 April 2011 ("First Consmin Correspondence") regarding the profile of OMH's share register and free-float post-listing on the Hong Kong Stock Exchange. • Resolution 10 – Blanket statements made in relation to proposed amendments to OMH's constitution The inclusion of Bye-laws 52AA.1A and 52AAA.32A to the effect that subject to listing of OMH on the Hong Kong Stock Exchange, all takeover bids and proportional takeover bids shall be conditional upon the requirements of The Securities and Futures Commission of Hong Kong ("SFC") as required under The Codes of Takeovers and Mergers and Share Repurchases in Hong Kong ("Hong Kong Takeover Codes"), reiterates the regulatory position In Hong Kong that will apply irrespective of the inclusion of these Bye-laws. The Hong Kong Listing Rules state that "The issuer shall comply with the Hong Kong Takeovers Code". In other words, the Hong Kong Takeover Codes will always apply regardless of the inclusion of Bye-laws 52AA.1A and 52AAA.32A in the Company's Bye-laws and the inclusion of references to the relevant Hong Kong Takeover Codes provisions in the Bye-laws is simply to reflect the regulatory requirements. The primary purpose of the Hong Kong Takeovers Code "is to afford fair treatment for shareholders who are affected by takeovers ... seek to achieve fair treatment by requiring equality of treatment of shareholders, mandating disclosure of timely and adequate information to shareholders to make an informed decision as to the merits of an offer…" The Hong Kong Takeover Codes are detailed and extensive. The Company is of the view that shareholders, taking into consideration each of their specific circumstances, may have to seek independent advice if they wish to obtain detailed information with respect of the Hong Kong Takeover Codes and their particular application. In these circumstances, we do not consider that a summary of the Hong Kong Takeover Codes is required for shareholders to make an informed decision on whether these Bye-law amendments should be approved. The Hong Kong Takeover Codes will provide shareholder protection in the spirit intended by the regulators in Hong Kong. It is not only mandatory in application to the Company upon its listing in Hong Kong but would also put the Company on the same level playing field with all other Hong Kong listed companies in terms of governance requirements. We note that the Australian takeovers laws apply for a takeover to be triggered at the 20% threshold whereas the similar threshold in Hong Kong is 30%. Consequently, in this particular respect, the Australian takeover law provisions are more onerous. • Resolution 11 – Approval for renewal of the proportional takeover provisions in Bye-law 52AA For the reasons outlined in our response in relation to Resolution 10 above, and the fulsome relevant information given in the AGM Notice on Resolution 11, we are of the view that shareholders may make an informed decision in relation to Resolution 11 which seeks the approval of shareholders to the renewal of the existing proportional takeover bid provisions in Bye-law 52AA of the Company's Bye-laws. • Conflicting takeover regimes Shareholders of the Company have also agreed as members of the Company to comply with the Company's Bye-laws including the takeover provisions in Bye-laws 52AA and 52AAA ("Takeover Bye-laws"). Accordingly, compliance is required with the Takeover Bye-laws Including any additional compliance to conform to the Hong Kong Takeover Codes which, as explained above are mandatory in their application upon the Company's listing in Hong Kong. We do not consider that detailed commentary is required on the interaction between Hong Kong Takeover Codes and the Takeover Bye-laws for shareholders to make an informed decision on whether the particular Resolutions 10 and 11 of the AGM Notice should be approved. As noted above, the Hong Kong Takeover Codes will apply irrespective of these proposed Resolutions. In Hong Kong, any document communicating a takeover to shareholders would also be the subject of vetting by the SFC and the purpose of that document will contain explanations as to the provisions applicable at that time to persons who wish to accept the offer, any recommendations in relation to the offer and such other information as the regulators may require. • Change from secondary listing to dual listing We confirm that subject to amongst other things, the approval by the Hong Kong Stock Exchange and the registration of the Global Offering prospectus with the Hong Kong regulatory authorities, the Company will be subject to the regulatory requirements of the Hong Kong Stock Exchange, the SFC and the ASX. Clearly, the Company will be subject to more onerous requirements as a result of the dual listing as it will be subject to the additional laws, rules and regulations of Hong Kong postlisting. In our view it would be disproportionately costly and overly burdensome and thus not necessary for the Company to provide shareholders with a commentary of these laws, rules and regulations to make an informed decision solely on whether to approve the Hong Kong listing. Such a summary would be rarely seen in practice and it would only be possible to provide a generic summary of such laws, rules and regulations. Shareholders can expect to receive salient and important guidance on particular matters arising in the future but otherwise should seek their own independent legal advice if they wished to obtain a more detailed understanding of the applicable laws rules and regulations. The Company's decision to seek a primary listing on the Hong Kong Stock Exchange as opposed to a secondary listing took into account legal advice received from its counsel in Hong Kong to the effect that a primary listing could be progressed more quickly than a secondary listing in view of the time taken for regulatory vetting of a number of additional waivers that would be applicable to a secondary listing. For a secondary listing, an issuer would usually seek to apply for, among other things, a dispensation from shareholder approval requirements for certain transactions, including connected transactions (as defined under the Hong Kong Listing Rules). A primary listing in Hong Kong also means that there will be added requirements for shareholder approvals for certain types of transactions, thereby delivering more corporate governance safeguards to shareholders. Clearly, the Company will incur additional costs in order to seek and maintain a listing on the Hong Kong Stock Exchange. However, the Company is of the view that such costs will be decisively outweighed by the benefits of the dual listing. Such benefits are disclosed in the AGM Notice as follows: The key benefits attributable to OMH pursuing such capital raising initiatives with a dual listing on the HKSE include: • enhanced access to capital markets which have an understanding of the OMH Groups businesses and growth strategies; • gateway exposure to Mainland China; • ability to leverage on Mainland China's continued growth; and • free flow of capital and information. The HKSE is a global exchange and as at February 2011 was the 7th largest exchange in the world by domestic market capitalisation and the 3rd largest exchange in Asia. In 2010 initial public offerings on the HKSE exceeded US$57 billion. The Company considers that the dual listing on HKSE will further broaden the Company's Shareholder base internationally and give the Company access to future capital raising opportunities in the growing Asian market to support its longer term growth strategy. In addition, being strategically positioned in this well established and highly liquid market will be of significant benefit to the Company should it contemplate future international acquisitions and/or growth opportunities. • Change to shareholding structure We have responded to your queries regarding OMH's shareholding structure postlisting on the Hong Kong Stock Exchange to the extent we are able to in the OMH Response to the First Consmin Correspondence and in the AGM Notice. The results of the book-build process cannot be determined at this point in time, and consequently we are unable to provide you with a response to your queries relating to the profile of the Company's share register or free-float post-listing on the Hong Kong Stock Exchange save that the Company will of course be in compliance with the free float requirements of the Hong Kong Stock Exchange. For the reasons outlined in the OMH Response to the First Consmin Correspondence, we are unable at this point in time, to provide you with any further information in relation to the issues raised in the First Consmin Correspondence or the Second Consmin Letter. • Lack of information on additional obligations that may be imposed on OMH shareholders In our view it is not reasonable to require the Company to provide shareholders with a summary of the additional regulatory requirements that may be imposed on OMH or OMH's shareholders as a result of the Hong Kong listing. The Company does not have knowledge of the specific circumstances of each individual shareholder and it would not be possible to provide shareholders with a summary of all laws, rules and regulations that may apply to them given the varying circumstances between shareholders. Shareholders would have to seek independent legal advice suitable to their particular circumstances if they wished to obtain a detailed understanding of the applicable laws, rules and regulations. The additional information that you have requested seems to be of specific interest to you and we have not received any request for further information from any other shareholder, including in relation to the specific details of Hong Kong laws, rules and, regulations that may apply to them. However, in order to assist, attached in Annexure A is a summary of the key comparisons between the listing rules of the ASX and the Hong Kong Stock Exchange. This summary was prepared for internal purposes and has been submitted to the Hong Kong Stock Exchange as part of OMH's application for dual listing. It is not a regulatory requirement to provide such information to OMH shareholders and has only been provided with this letter to indicate the comprehensive nature of review OMH has undertaken. For those investors who wish to trade their shares on the Hong Kong Stock Exchange, the Hong Kong Listing Rules provide that unless the Hong Kong Stock Exchange agrees otherwise, "only securities registered on the Hong Kong register may be traded on the Hong Kong Stock Exchange". Stamp duty is chargeable on the transfers of shares on the Hong Kong register. For investors who do not want to participate in trading their shares on the Hong Kong Stock Exchange, they are at liberty to leave their shares registered on the Australian share register and in a trading environment familiar to them. There is no obligation for shares on the Australian share register to be shunted to the Hong Kong register. In order to ensure full, fair and transparent treatment of all OMH shareholders with provision of this supplementary information, a copy of this letter will be released on the ASX Company Announcements Platform. We consider that OMH has provided shareholders with all salient and important relevant information in the AGM Notice to enable them to make an informed decision in relation to the Resolutions set out in the AGM Notice. OMH does not propose in the circumstances to postpone its AGM scheduled for 10.30 am (Singapore time) on Wednesday, 20 April 2011 and incur unnecessary costs to the detriment of shareholders. We trust the provision of this detailed supplementary information given in good faith and on short notice satisfies your requirements. Yours faithfully OM HOLDINGS LIMITED Low Ngee Tong Executive Chairman 43 On 15 April 2011, CML again wrote to OMH providing more detail in respect of the concerns which it said that it then had. That letter was in the following terms: Proposed dual listing and issue of new shares We refer to your letter of 14 April 2011 ("14 April Letter") and your letter dated 13 April 2011 ("OMH Initial Response"). Having considered the points you raised in your 14 April Letter, it remains our view that the notice of annual general meeting end explanatory statement dated 24 March 2011 ("AGM Notice") issued by OM Holdings Limited ("OMH") has failed to provide other key information that would be relevant for all OMH shareholders in their decision-making process at the upcoming AGM. As noted in our letter to you dated 8 April 2011 ("AGM Deficiencies Letter"), our past correspondence and the media release we issued on 14 April 2011, our key objections to the AGM Notice is the lack of meaningful disclosure as to: • why OMH is proposing the dual listing of the shares of the company on the Main Board of The Stock Exchange of Hong Kong Limited ("HKSE") ("Hong Kong Listing"); • OMH's assessment of the benefits and risks associated with the proposed listing; • the dilutive effect of the proposed new issue (both in terms of the number and pricing of any new shares issued) and the potential profile of the share register post listing; • the additional obligations and costs that may be imposed on OMH and its shareholders; and • the alternatives investigated and considered by OMH and why they were considered inferior to the Hong Kong Listing. As noted below in greater detail, you imply that ConsMin is the only shareholder who has indicated its objections to the resolutions relevant to the proposed Hong Kong Listing. We do not believe this is the case, and request that you confirm whether at the time of writing your 14 April Letter, no proxies had been lodged to vote against resolutions 6 to 11 (being resolutions relevant to the proposed Hong Kong Listing). If such proxies had been lodged, we would consider the implication In the 14 April Letter misleading, particularly in circumstances where OMH intended to release it to the market. The responses that you provided in your 14 April Letter only serve to reinforce our concerns. By way of example, as noted below, seeking to rely on the fact that the Australian Securities Exchange ("ASX") did not object to the content of the AGM Notice, is misconceived and evidences a lack of understanding of the minimum good corporate governance standards that should be observed and the level of transparency that should be applied to OMH's decision-making process. In response to the points you raised, we note as follows. • Compliance with content requirements of the listing rules – We note your comment that the AGM Notice has been examined by the ASX, who has confirmed that it has no objection to the notice in relation to compliance with its listing rules. ASX Listing Rule 7.3 indeed sets out the content requirements that must be met by a notice of meeting where shareholders' approval for the issue of new shares under ASX Listing Rule 7.1 is sought. Given these requirements are drafted to apply to all share issuances that require shareholders' approval under Listing Rule 7.1, they serve as minimum standards for disclosure and not be seen as setting boundaries of the types of disclosure that should be included in a notice of meeting to assist a company's shareholders to make an informed decision. This is a matter that the directors must turn their minds to in the circumstances of the proposed issue. The disclosure supporting a proposed resolution for an issue of shares to fund working capital will be very different to that required where the issue is to provide funding for an acquisition of a new business. This issue of bare minimum disclosure is particularly acute in this case where the share issuance being proposed is not only very significant in size (and at a potentially significant discount), it is also linked to a listing which, if it proceeds, would be a major step for OMH and all its shareholders. If OMH asserts, as appears to be the case, that it is sufficient to simply aim to meet the minimum content requirements set out in the relevant listing rules of the ASX which apply to share issues generally, as opposed to considering the real information needs of OMH shareholders in the context of the proposed transaction, this is simply misconceived and is simply nothing short of poor shareholder transparency and disclosure. Further, it leads us to question, once again, the level of corporate governance that we should expect from OMH and its board of directors. Compliance with the relevant minimum general content requirements for share issue approvals under the ASX Listing Rules does not, by itself, discharge the OMH directors' obligation to its shareholders to ensure that they are given adequate information and time to make an informed decision on resolutions being proposed for approval. We maintain that the disclosure provided is completely lacking. Resolution 10 – Blanket statements made in relation to proposed amendments to OMH's constitution – It would appear from your response to our queries that you have misunderstood our concern. If the Hong Kong Listing were to proceed, we would of course expect OMH to observe all the relevant laws and regulations in Hong Kong. The fact that these requirements would apply, irrespective of what OMH's bye-laws may state, is also a given. Our concern, as previously noted, is that the AGM Notice does not contain any explanation by the OMH directors of what impact these new requirements would have on the voluntary takeovers regime that OMH has chosen for itself when the takeover provisions as set out in Bye-laws 52AA and 52AAA ("Takeover Bye-laws") were adopted 3 years ago. Our concern has not been addressed. What we are asking is not for a detailed summary of all the differences between the regimes. At the very least, we would have expected the OMH board to have done some assessment of the key differences between the regimes as part of its consideration of the merits for seeking a listing on the HKSE. To the extent that there are material differences, which would affect the operation of the Takeover Bye-laws from the perspective of the OMH shareholders, we believe this is information that needs to be given to all shareholders as part of their decision-making process, and goes further to ConsMin's earlier points regarding poor disclosure. The fact that OMH shareholders may or should also seek independent advice is, again, not the point. At the very least, some disclosure of the OMH's board's assessment of the impact of these amendments and a "health warning" to shareholders to seek independent advice should have been included fn the AGM Notice. Furthermore, at no point have we commented on the merits of the takeovers regime as set out in The Codes of Takeovers and Mergers and Share Repurchases in Hong Kong ("Hong Kong Takeovers Code"). In fact, with the Hong Kong Takeovers Code being a market based regime, it may be a step in the right direction from a corporate governance perspective for OMH and its shareholders to be governed by this regime as opposed to the selective regime in the Bye-laws, which is based on parts of the regime set out in the Corporations Act 2001 (Cth) – with certain key differences which, as we have previously noted to you on a number of occasions, give undue weight and influence to the incumbent board. • Resolution 11 – Approval for renewal of the proportional takeover provisions in bye-law 52AA – Please see our response in relation to Resolution 10 above. • Conflicting takeover regimes – Please see our response in relation to Resolution 10 above. Furthermore, in relation to your point that as members, shareholders of OMH are bound to comply with the Bye-laws, including the Takeover Bye-laws, we disagree that it is a natural extension of this legal reality that OMH shareholders are then required to continue to agree to comply with the Takeover Bye-laws, as may be amended to conform to the Hong Kong Takeovers Code. First, the Hong Kong Takeovers Code will only apply if the Hong Kong Listing proceeds. Secondly, as noted above, there may be merits for OMH to adopt the regime set out in the Hong Kong Takeovers Code, without continuing to retain the regime set out in the Takeover Bye-laws. The point here again is that the AGM Notice does not offer any explanation on how the OMH board formed its decision to retain the Takeover Bye-laws. As OMH shareholders are now being asked to approve the renewal of these provisions in the upcoming AGM, this information would be very relevant for the shareholders' decision-making process. • Change from secondary listing to dual listing – As was our position in our AGM Deficiencies Letter, the AGM Notice is silent on the rationale behind why OMH has changed its listing plans and is now seeking a dual listing. Given OMH had tried to seek a secondary listing of its shares on the HKSE in 2008, which had been progressed to quite a late stage of the listing process before it was cancelled, we do not believe it is unreasonable to ask for an explanation from the OMH board as to why it has now chosen to seek a dual listing when it had only announced in November 2010 of its plans to once again seek a secondary listing. In terms of the roles of the various regulators and what additional regulatory requirements would apply with the proposed dual listing regime, again, at no point did we ask for detailed commentary of what those requirements may be. Where we find the disclosure in the AGM Notice deficient is that it contains no discussion of these points at all, nor even a warning that OMH shareholders should seek independent advice if there are any concerns about what those requirements may be. It is only after we raised our concerns with you that you have since given some explanation in your 14 April Letter to address this point. This information should have been disclosed in the AGM Notice from the beginning. As to your point that a primary listing on the HKSE means that there will be added requirements for shareholder approvals in certain situations, which would deliver more corporate governance safeguards to shareholders, you will not find us disagreeing, that this would be a benefit to OMH and its shareholders. The issue that we had raised is that the AGM Notice does not contain any discussion on what impact, positive or negative, the proposal may have on OMH's operations and businesses. As with any corporate action, costs will naturally be incurred. What is not set out in the AGM Notice is a balanced view that material costs may be incurred by OMH by seeking a dual listing and how the OMH board formed its view that the benefits of this listing would outweigh the costs involved. Again, OMH has only provided a limited explanation on these issues after we requested for more information. To this date, OMH has not disclosed what capital raising alternatives, if any, have been investigated and considered by OMH and why they were considered inferior to the Hong Kong Listing. This is a key matter and particularly relevant given the Australian market has been very supportive of pro-rata issues as an avenue for raising funds with recognised benefits to companies and their shareholders. Australian market rules have indeed been amended to facilitate these issues. It would appear to us that OMH's board, considering the size of the company, would need to have very good reason to raise funds outside of Australia and not provide existing OMH shareholders with any pro-rata entitlement to participate in such a sizeable issue. • Change to shareholding structure – We note your position that OMH is simply unable to provide further information to address these queries. Given the size of the proposed new issue, we remain of the view that the uncertainly relating to the post-listing shareholding structure represents a real risk to the interests of OMH shareholders. Specific concerns on this point have already been previously communicated to you in our past correspondence. The fact that you say that no further assurances can be provided will certainly need to be taken into account when OMH shareholders consider whether to approve the proposed new issue. • Lack of information on additional obligations that may be imposed on OMH shareholders – As already noted above in numerous occasions, our ongoing concern is that the AGM Notice contains no reference to the fact that additional obligations may be imposed on OMH and its shareholders. This reinforces our view that the AGM Notice appears to present a very one-sided assessment, albeit not a very thorough one, of the proposed Hong Kong Listing. It assumes all OMH shareholders are familiar with the listing process and the regulatory regime in Hong Kong. You noted in your letter that the additional information that we had requested seems to be "of specific interest to you and we have not received any request for further information from any other shareholder, including in relation to the specific details of Hong Kong laws, rules and regulations that may apply to them." First, given the fact that OMH shareholders have been given less than 3 weeks to review and consider the resolutions set out in the AGM Notice, it is not surprising that they may not have had enough time to fully consider the implications of the resolutions proposed, particularly given the scant details provided. Also, there is a clear implication in your statement that no other shareholders have expressed concerns. Others may not have written to you as we have, but if they have already lodged proxies against the resolutions in relation to the proposed Hong Kong Listing, we would find your point disingenuous. Indeed, we have been contacted by other OMH shareholders who have expressed similar concerns with the lack of information provided. We would be surprised if no shareholder has already indicated that it would vote against Resolutions 6 – 11 and we ask that you confirm whether, at the time of writing your 14 April Letter, proxies had been lodged by other OMH shareholders that indicated their objection to resolutions in relation to the proposed Hong Kong Listing. If such proxies had indeed been received and you were implying in correspondence released to the market that no other shareholders were concerned, this would, in our view, be quite inappropriate and again indicate a lack of transparency of the company's dealings and communications to its shareholders and be yet another example showing lack of good corporate governance. As for the summary of the key comparisons between the listing rules of the ASX and the HKSE, we have not had a chance to review it in detail. (From our brief review, it appears to us that this comparison is not tailored to the requirements that apply to a Bermuda incorporated entity like OMH, particularly one that has the Takeover Bye-laws that subject OMH to a unique takeovers regime.) The fact that such a comparison was required to be submitted to the HKSE as part of the listing process reconfirms our position that this information is relevant (albeit not necessarily at that level of detail) to address any concerns as to whether the proposed dual listing structure would provide shareholders with the necessary protections from a corporate governance perspective. It is specifically for this reason that we had raised our query and we believe such information, or a similar comparison of the key requirements, should have been included in the AGM Notice. In our view, the failure to address this issue at all is clear evidence of the deficiency in the AGM Notice. We note the information that you provided in relation to our query about Hong Kong stamp duty implications. This information provided a better picture of when and how OMH shares may lie traded on the HKSE. Again, we are of the view that this information should have been included in the AGM Notice so that OMH shareholders could form an informed view as to whether OMH shares, in practice, could be shunted between (the two stock exchanges without incurring substantial costs. As noted in our previous correspondence, it is our view that the types of information that we have requested to date are information that would be relevant for us as well as other OMH shareholders to properly consider the proposed resolutions to be voted on at the upcoming AGM on 20 April 2011. Given the potential significant impact that the Hong Kong Listing may have on OMH's future direction, these resolutions should only be voted upon when OMH shareholders have been given a balanced view of the key pros and cons associated with this proposal. For this reason, we have on numerous occasions asked for the requested information to be made available not only to us but also to all other OMH shareholders as these resolutions. It is also for this reason that we issued a media release on 14 April 2011 to outline our concerns so that other OMH shareholders could assess the information noted and form their own view as to whether they are prepared to vote for Resolutions 6 to 11 given the lack of satisfactory disclosure. Yours faithfully Glenn Baldwin Consolidated Minerals Limited 44 There the correspondence ended. The lawyers for OMH sent a further letter to the lawyers for Stratford Sun this morning, but that letter post-dated the commencement of this proceeding. 45 CML's letter dated 15 April 2011 is the first communication in which CML asserted that OMH had failed to comply with the requirements of ASX Listing Rule 7.3. This letter appears to be an attempt to present a picture of genuine concern about the resolutions to be put at the AGM in circumstances where the previous questions asked and requests for information made by CML had been answered in a reasonable fashion by OMH. Still, no threat of litigation was made. 46 Then, on 18 April 2011, the lawyers for Stratford Sun wrote to OMH informing it that they had been instructed to make an urgent application to this Court in its New South Wales District Registry seeking amongst other things: (1) A declaration that the Notice of Meeting is invalid; and (2) Orders that OMH be restrained from putting forward certain resolutions to shareholders at the AGM. 47 Somewhat tongue in cheek, the author said: "As a matter of courtesy, and to allow you sufficient time to engage counsel, we foreshadow that we intend to make the application this afternoon for short service of the application. We will seek to have the matter brought back before the Court tomorrow morning with you having the opportunity to obtain proper representation." 48 I say that these remarks were made somewhat tongue in cheek because the lawyers for Stratford Sun are based in Perth (although they have a Sydney presence) and it was known to those lawyers that OMH had generally been represented in the past by lawyers based in Perth. Indeed, there had been a prior piece of litigation between the same parties which had been commenced and dealt with in the Perth Registry of this Court (Stratford Sun Ltd v OM Holdings Ltd (2009) 74 ACSR 698). Litigation in New South Wales on such short notice was inevitably going to present logistical difficulties for OMH. It does seem to me, by way of general observation, that there was a fair bit of tactical manoeuvring occurring yesterday and in the days leading up to yesterday when the correspondence which I have referred to and extracted at [36]–[47] above was being exchanged. The Parties' Submissions (Serious Question to be Tried) 49 Stratford Sun submitted that there were several serious questions to be tried. 50 The first of these concerned the question of whether or not the Notice of Meeting and Explanatory Statement had provided to the shareholders in OMH sufficient information for them to make an informed judgment on the resolutions to be put at the AGM. In particular, Stratford Sun submitted that the information provided in respect of Resolution 6 was inadequate. Resolution 6 concerns the allotment of 345,000,000 new shares and the proposed listing by way of secondary listing of OMH on the HKSE. 51 It was necessary for OMH to secure the approval of its shareholders for the proposed new listing on the HKSE because: (a) The Bye-Laws of OMH require it to comply with the ASX Listing Rules; (b) Rule 7.1 of those rules restricts a listed company's right to issue or agree to issue equity securities in certain circumstances unless approval has been obtained from the holders of ordinary securities in general meeting; and (c) The circumstances described in Rule 7.1 are in play in the present case. 52 An issue of equity securities is not prohibited under Rule 7.1 if it is approved by holders of ordinary securities in general meeting and the notice of the meeting sets out the matters specified in ASX Listing Rule 7.3. I have reproduced that rule at [35] above. 53 Stratford Sun submitted that OMH had breached Rule 7.3 because it had failed to provide any information at all as to the names of the allottees (if known) or the basis upon which allottees will be identified or selected as required by Rule 7.3.4. It was submitted that there was simply no indication in the material provided to the shareholders of what that basis was to be. 54 The material, however, made clear that the proposal involved the directors of OMH at their absolute discretion (in consultation with the advisers to the issue) making the relevant decision as to the identity of the allottees under the new issue and the terms upon which shares would be allotted to those persons or entities, subject to the other terms set out in the Notice of Meeting and Explanatory Statement. So, the real question was: Was that disclosure sufficient for the purposes of Rule 7.3.4? Stratford Sun submitted that it was not. "The absolute discretion of the directors" was no basis at all. 55 A second point relied upon by Stratford Sun was that it was not possible as matters presently stood for anyone to know who it was who would be permitted to vote at the meeting because there was no basis for the identification or selection of allottees disclosed in the Notice of Meeting or Explanatory Statement and the terms of the Voting Exclusion Statement referable to Resolution 6 suggested that the whole world was excluded from voting. 56 A third question articulated by Stratford Sun was that the directors of OMH had breached their directors' duties because they had not made full and frank disclosure to the shareholders of all information which they had concerning the proposed new issue. Senior Counsel for Stratford Sun submitted that it bordered on the inconceivable that those directors had not had discussions with potential investors the substance of which should have been disclosed. 57 In addition to these matters, Stratford Sun relied upon CML's constant refrain in the correspondence to the effect that insufficient information had been provided in respect of the particular amendments to the Bye-Laws of OMH to which I have referred at [27] above. 58 Counsel for OMH submitted that all of these arguments were weak and did not meet the threshold requirement that Stratford Sun satisfy the Court that there are, at present, one or more serious questions to be tried. 59 I do not propose to comment further on the arguments advanced on behalf of Stratford Sun directed to the requirement that it demonstrate to the satisfaction of the Court that there is at least one serious question to be tried at the present time. I propose to accept the proposition advanced by Stratford Sun that there are serious questions to be tried along the lines of those put in submissions, without deciding whether that is truly so. Further, on that assumption, I think that the claims for interlocutory relief are sufficiently connected to the claims for final relief made in the Originating Process to satisfy the requirements of the law explained by the High Court in Lenah Game Meats. The Parties' Submissions (Balance of Convenience and Justice) 60 Stratford Sun put the following matters as tilting the balance in favour of injunctive relief. 61 First, it was said that it was an undesirable state of affairs that a meeting should proceed in circumstances where there was such an obvious uncertainty as to the operation of the Voting Exclusion and obvious uncertainty as to who was entitled to vote at the meeting. 62 Second, it was submitted that Stratford Sun would suffer irremediable prejudice because its prospects of obtaining final relief may, putting it bluntly, be less than its prospects of obtaining interlocutory relief since there may be additional hurdles placed in the path of the grant of that final relief. Particular reference was made to the last two lines of s 1101B(1) of the Act which is in the following terms. However, the Court can only make such an order if the Court is satisfied that the order would not unfairly prejudice any person. 63 Third, it was submitted that, if no injunctive relief is granted, shareholders in a publicly listed company (viz OMH) will have voted on a fundamental issue on the basis of inadequate disclosure (or at least arguably inadequate disclosure) of material and in circumstances where the meeting was called in contravention of the ASX Listing Rules and the corporation's own Bye-Laws. 64 Fourth, it was submitted that once OMH is listed on the HKSE, the rights and remedies available to the parties will be very different. The laws and listing rules of Hong Kong will come into play and irrevocably affect those rights. 65 Finally, as a development of the second submission to which I referred at [62] above, Stratford Sun went so far as to suggest that it might not have any remedy in respect of the breach, if interlocutory relief is not granted. 66 On the other side of things, Stratford Sun submitted that there was no real prejudice to OMH, especially when an undertaking as to damages is offered and a general commitment to the provision of security for that undertaking was made by Senior Counsel on behalf of Stratford Sun. The AGM could go ahead. The only consequence of the grant of interlocutory relief as claimed would be that certain resolutions would not be put to the meeting. 67 It was also said that there was no delay of any significance in the present case because whatever delay had occurred had not caused any prejudice to OMH and had been explained, in any event, by the fact that there had been a reasonable exchange of correspondence in the period between late March and yesterday. The implication behind this submission was that it was only yesterday that the inevitability of litigation became apparent. 68 OMH, in the time available to it, managed to place before the Court an affidavit from the solicitor representing OMH in which she addressed a number of matters which went to the balance of convenience and the balance of justice. I will endeavour to summarise those matters as best I can. 69 First, it was said that no warning of the current application was given prior to yesterday. That submission recognised that there had been an exchange of correspondence, but that no threat of litigation had been made until the very end of that exchange of correspondence (viz on 18 April 2011, yesterday). 70 Second, the ASX had seen the Notice of Meeting and Explanatory Statement before those documents were sent to shareholders and had informed OMH that it had no objection to the Notice being sent to shareholders. The ASX said: I confirm that ASX has no objection to the notice. Please note that this notice of no objection relates to compliance with the listing rules only. 71 Third, it was said that OMH had now received proxy forms from shareholders covering over 80% of the issued capital of OMH and that the cut off time for the receipt of those proxies (if they were to be valid) was 10.30 am yesterday, 18 April 2011. The proposition contained in that evidence was that Stratford Sun had consciously refrained from commencing this proceeding until after the closing off point for the receipt of proxies. 72 Fourth, the evidence established that only one other shareholder had actually communicated with OMH concerning the form of the Notice of Meeting and the Explanatory Statement. The complaint from that shareholder was not so much that the information furnished was inadequate, but rather that the transactions proposed to be undertaken by OMH were improvident and unsatisfactory. 73 Fifth, the following matters were raised under the heading of "Utility in Granting the Injunctive Relief Sought". 74 The first of these was that the passing of Resolution 6 would do no more than authorise the issue of up to 345,000,000 shares on the terms of that resolution and that other steps would have to be taken before that resolution could be fully effectuated. The first step was the completion of the in-principle regulatory vetting processes by the listing committee of the HKSE. This was not expected to be completed until, at the earliest, the end of the first week of May 2011. The point here was that it would not be possible for the directors of OMH to issue any new shares pursuant to Resolution 6 unless and until the HKSE Listing Committee had granted its in-principle approval. 75 It was then said that other resolutions depended upon OMH being listed on the HKSE, an event which was not expected to occur before 30 June 2011, at the earliest. The lawyer for OMH pointed out that there would be wasted costs were injunctive relief to be granted. She also said that an injunction would very likely delay the progress of the HKSE listing and possibly have a very serious detrimental effect on the prospects of success for that listing because it would very likely result in a delay which would make the listing less attractive to investment funds and institutional investors. Consideration 76 As I indicated to Senior Counsel for Stratford Sun during argument, I am prepared to fix the matter for final hearing on 13 May 2011. That date is a date well before 30 June 2011 and shortly after the first milestone that might occur after the date when the listing committee of the HKSE will have given its in-principle approval to the listing of OMH on that exchange. 77 The allegations made by Stratford Sun that OMH breached the ASX Listing Rules and the concerns expressed by Stratford Sun as to whether or not anyone would know with any degree of certainty who it was who was entitled to vote at the AGM are all matters, it seems to me, which can be satisfactorily looked at on a final basis when the outcome of the AGM is known and the way in which these matters were addressed at that meeting is known. 78 The proposition that, because Stratford Sun will not or may not be able to obtain the relief which it seeks on a final basis for the reason that additional obstacles may be erected to the granting of that relief between now and the final hearing, is not an attractive one. As I see matters at the moment, while there is a theoretical possibility that Stratford Sun's concerns may become reality, I think that, practically speaking, this is unlikely. I do not propose to give much weight to this concern. 79 It does seem to me that this is a case which falls on the side of the line where interference in the ordinary running of the corporation's affairs by way of interlocutory injunction is not warranted. 80 The fact that no real alteration in the parties' rights is likely to occur before the final hearing and the fact that there is a very real possibility that the proposed listing on the HKSE and associated new share issue may be effectively stymied by the grant of interlocutory relief incline me against the grant of interlocutory relief. There is also the matter of wasted costs which, on its own, would not carry much weight in the face of the offer by Stratford Sun of a secured undertaking as to damages but which, along with the other factors to which I have referred, should carry some weight. Finally, there is the position of all of the other shareholders in OMH. They are expecting the AGM to go ahead and they appear to be ready to vote on the resolutions proposed to be put to the meeting. They must be taken to be well aware of CML's complaints and concerns, yet none of them has attempted to stop the meeting. Their right to have the meeting proceed weighs heavily against injunctive relief. 81 I am also concerned about the way in which the matter has unfolded since the Notice of Meeting was despatched. It seems to me that Stratford Sun may well have always intended always to block the putting of the contentious resolutions at the meeting but chose not to move earlier in order to maximise its prospects for interlocutory relief. It does seem to me that Stratford Sun decided that it would be in its best interests to make the present application at the very last moment when it could have done so much earlier. My present feeling about the time that has elapsed is that it has been deliberately allowed to elapse for strategic or tactical reasons. 82 For all these reasons, I think that the balance of convenience and justice falls on the side of refusing injunctive relief and I propose to take that course. 83 I will order that the costs of the proceeding to date be OMH's costs in the proceeding. I will also make appropriate directions readying the matter for a final hearing on 13 May 2011. There will be orders accordingly. I certify that the preceding eighty-three (83) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster. Associate: Dated: 28 April 2011