IT'S piquant that a shareholder of Datadot Technology, which makes ID equipment using microdot technology, is trying to establish whether, under the cloak of a capital raising, parties have obtained significant influence over, if not control of, the company.
In March, Datadot announced a placement of 15 per cent of the capital and a 1-for-1 non-renounceable rights issue. Both were underwritten by KTM Capital, which specialises in raising equity for small-cap companies. The letter of offer for the rights issue disclosed that if the offer was subscribed to 50 per cent, KTM would emerge with 25 per cent of the company and if there was a 100 per cent shortfall, KTM would have 50 per cent.
The offer document added that KTM had advised that if it controlled the company it had no "present intention" to become involved in the management, to seek changes to the operations, or to appoint a director.
The placement was taken up 50-50 by two parties only, TM Consulting and Bannaby Investments. That gave TM 6.5 per cent of Datadot, while Bannaby, which already owned 2.7 per cent, went to 9.2 per cent.
The rights issue was subscribed to 66 per cent and the shortfall taken up by the same two parties, suggesting they might have been sub-underwriters. That gave TM 17.2 per cent of Datalot and Bannaby 19.2 per cent, an aggregate of 36.9 per cent, sufficient to give significant influence over, if not control of, the company. Bannaby is controlled by Keith Kerridge and TM by Todd McGrouther. They happen to be the founders of KTM Capital, and are directors and shareholders.
William McCleugh, who holds 3 per cent of Datadot after the placement and rights issue, yesterday complained to the Takeovers Panel. He contends that TM and Bannaby are associates and have contravened the substantial shareholding provisions and the takeover code, by acquiring a relevant interest in more than 20 per cent of the company without first making a takeover offer.
The move to negate the voting power of Kerridge and McGrouther is interesting as Datadot also said yesterday that a shareholder with more than 5 per cent had lodged a requisition requiring the company to call a shareholder's meeting to vote on the removal of directors Michael George and Connie Lo Sin Sye."
