The Griffin Corporation
TSX VENTURE : GRN

The Griffin Corporation

August 28, 2006 12:37 ET

The Griffin Corporation Discloses Reasons for Disqualification of Dissident Proxies at AGM

KITCHENER, ONTARIO--(CCNMatthews - Aug. 28, 2006) - The Griffin Corporation (TSX VENTURE:GRN) held its annual general meeting of shareholders ("AGM") at the offices of Heenan Blaikie, 200 Bay Street, Suite 2600, South Tower, Royal Bank Plaza, Toronto, Ontario on Friday, July 21, 2006 at 9:30 am.

Prior to the AGM, Messrs. Joseph Schillaci, John Arnold and Gerald Kluwak (the "Dissident Shareholders") circulated an information circular (the "Dissident Circular") dated July 10, 2006 and solicited proxies to vote in favour of a slate of directors other than those proposed by management in its information circular. The Dissident Circular also raised certain specific concerns relating to the propriety of both the process and the substance of certain transactions undertaken by the Corporation with related parties during the previous 12 months.

At the AGM, proxies held by the Dissident Shareholders and their representatives representing 8,999,801 common shares were challenged by counsel to Amin Visram, a significant shareholder of the Corporation. Mr. Visram's counsel, Mr. Don Sheldon, made representations to the meeting's chairman, Mr. Irwin Pasternak, that the Dissident Circular contained deficiencies that were so material as to render the proxies held by the Dissident Shareholders invalid. Mr. Al Wiens, a proxy holder and counsel to the Dissident Shareholders asked to be permitted to make submissions on the validity of the dissent proxies. On the concurrence of Mr. Sheldon and Mr. Wiens, the meeting was recessed to allow for submissions to the chairman in camera on the validity of the dissent proxies to be made.

Following the discussions in camera, the chairman reconvened the AGM. The chairman informed the meeting that he heard the submissions from counsel to Mr. Visram and counsel to the dissident shareholder group. He also had taken advice from the Corporation's corporate counsel. The chairman determined on the advice of the corporation's counsel, that the Dissident Circular was materially misleading and did not afford the shareholders sufficient information on which to make an informed decision on the matters for which the proxies were solicited.

The chairman concluded, among other things, that the Dissident Circular implied that the related party transactions completed by the Corporation in the prior year were either inappropriate or that the Corporation had somehow reneged on its prior obligations to the Dissident Shareholders. The Chairman concluded that these matters were so inadequately described in the Dissident Circular so as to render it defective to the point that the proxies it solicited were invalid.

The meeting then continued and carried out the business for which the meeting was called. After the disqualification of the Dissident Shareholder's proxies, total of 8,898,738 votes were cast at the AGM. A Report of Voting Results of the meeting was filed on SEDAR dated August 10, 2006.

Subsequent to the AGM, the Corporation received a letter from a solicitor advising that he acts on behalf of the Dissident Shareholders and indicating that he will take action in the matter of ruling made by the chairman at the AGM. The Corporation stands by the ruling of the chairman and it will vigorously defend any such action.

In addition, the Corporation and the board of directors wishes to be clear that the Corporation has never entered into any agreements with any member of the Dissident Shareholders group in regard to the management and affairs of the Corporation. In addition, the Corporation wishes to restate for the record that it followed all of the applicable requirements in connection with the related party transaction, which its shareholders approved in December 22, 2005. The Corporation and its board of directors stand by the shareholders in regard to their approval of such transactions, all as disclosed on the existing public record.

Contact Information

  • The Griffin Corporation
    Irwin W. Pasternak
    Chairman
    (519) 744-4400
    or
    The Griffin Corporation
    73, King Street West, 2nd Floor
    Kitchener ON, N2G 1A7