The applicants, dissident shareholders engaged in a proxy contest, sought a hearing and review of a Toronto Stock Exchange (TSX) decision that conditionally approved the issuance of shares by Eco Oro Minerals Corp. to certain shareholders without requiring a shareholder vote.
The TSX permitted an accelerated closing of the share issuance just days before the record date for a requisitioned shareholder meeting.
The Ontario Securities Commission conducted a de novo review, finding that the TSX overlooked material evidence regarding the proxy contest and erred in its interpretation of 'materially affect control.' The Commission set aside the TSX decision, concluding that the share issuance materially affected control and required shareholder approval.
To remedy the improper issuance, the Commission ordered Eco Oro to hold a shareholder vote to either ratify or reverse the share issuance, cease-traded the new shares pending the vote, and prohibited the new shares from being voted at the upcoming meeting.
