Yes this is definitely worth a read if you wish to know the...

Yes this is definitely worth a read if you wish to know the calibre of one of the directors we have:

http://www.takeovers.gov.au/content/DisplayDoc.aspx?doc=reasons_for_decisions/2013/014.htm

Especially:

"While it was clear that there was some relationship between Twinkle Woods and one of the Moreton directors, ....."

Identity of Twinkle Woods

1. The identities of the beneficial owners of Twinkle Woods had not been disclosed to shareholders.
2. Simply stating the name of the company "Twinkle Woods Limited" and providing a broad description of its activities did not provide shareholders with any useful information about the people who may gain significant influence over Moreton through the proposed issue of shares and convertible notes.
3. Therefore, while there may not be a specific legislative or regulatory requirement for the disclosure of the identities of the beneficial owners of Twinkle Woods in these particular circumstances, consistent with the principle in s602(b)(i) that shareholders should know "the identity of any person who proposes to acquire a substantial interest in the company", we consider that this information should have been disclosed.

Possible transfer of convertible notes

1. Mr Elks submitted that at a meeting in October 2013 with Andrew Purcell and Andrew Matheson he had been informed that the actual funder was not Twinkle Woods and that the investor wished to stay confidential.
2. Emails on 10 and 15 September 2013 between Moreton and Twinkle Woods referred to the possibility of transferring 60 – 65% of the convertible notes to a third party.
3. We were concerned that there may have been an undisclosed agreement or intention between Moreton and Twinkle Woods that a significant proportion of the convertible notes would be transferred to a third party. If so, consistent with the principle in s602(b)(i), the identity of any such third party should have been disclosed.

Decision

1. We think that:
   1. the break fee is likely to substantially coerce shareholders into approving the issue of shares and convertible notes to Twinkle Woods, contrary to the principle in s602(a) and
   2. Moreton's failure to disclose the beneficial owners of Twinkle Woods and, if one existed (see paragraphs 39 - 41), any agreement or intention to transfer convertible notes to a third party, is contrary to the principle in s602(b)(i).
2. We advised the parties that we were minded to make a declaration of unacceptable circumstances and final orders.

Subsequent events

1. During the proceedings:
   1. on 14 November 2013, Moreton announced that the resources at its Wandoan Coal Project had been reduced from 360Mt (indicated and inferred) to 84Mt (inferred) and
   2. on 19 November 2013, Moreton announced that it had been advised by Twinkle Woods that the Wandoan Coal Project resource downgrade announced on 14 November 2013 was a further event of default under the funding agreement.
2. On 22 November 2013, after we advised the parties that were minded to make a declaration of unacceptable circumstances, Moreton announced that Twinkle Woods would waive all then existing events of default, Moreton would repay Twinkle Woods the principal and pay all accrued interest on the loan ($1,018,071 in total) and Moreton could redraw the funding if the appropriate resolutions were approved by shareholders at the upcoming Annual General Meeting.
3. On 26 November 2013, Moreton announced, among other things, that the funding agreement had been terminated, the break fee would not be paid and the resolutions to approve the issue of shares and convertible notes to Twinkle Woods would not be put to the Annual General Meeting.¹⁶