The old directors might be gone but they have left a poison pill...

The old directors might be gone but they have left a poison pill behind for CGA.
See the clause in bold below from today's announcement.

I wonder if CGA knew that was in the agreement between CTN and OCFM.
I can just imagine the previous directors saying "Cop that you smart city bastards".

The only drawback is it is our money that they are brawling over..

One good thing about that clause, if it stands, is that it probably rules out CTN doing any dilutive capital raising for the sake of increasing CGA's funds under management,
That is what I feared might happen once the new "independent" directors got their feet under the CTN board table.

Also, if over the next three years OCFM's stock picks perform better than CGA's it is going to put the spotlight on the "independent" directors. How could they justify taking money away from OCFM?

Despite worries about these shenanigans not doing anything for the share price, I think what Mr Market really takes notice of is how the investment manager's stock picks are performing. Provided nobody can actually run off with the funds, that's all that really counts.
What is the NTA of the investment portfolio? The lack of price reaction to this announcement just confirms that.
In fact Mr Market might even be relieved that CTN is not going to be CGA's play thing just yet.

"The OCFM agreement differs in a material respect to the terms of the agreement with CFML in the
following manner:

 For 3 years from the date of the agreement, all proceeds raised from any capital raising must
be allocated to OCFM and no funds may be withdrawn from the OCFM portfolio.

 OCFM is entitled to a lower management fee of 0.8% pa when compared to the management
fee CFML of 1.25% pa up to $200m and 1% pa for greater than $200m. However OCFM is
also entitled to quarterly performance fee, calculated with reference to the S&P/ Small
Ordinaries Accumulation Index.

 Up to 10% of the Company’s funds under OCFM’s management may be invested in
international securities."

Cheers

These are my opinions only. Nothing that I have written here should be construed as disparagement of any of the parties or entities involved. For all I know, all of the parties and entities may be completely convinced of the correctness of their actions and be acting from the highest possible motives with all due skill and care in accord with their various responsibilities and obligations. Any figures and facts are mentioned in good faith but I accept no responsibility for their accuracy.