The EGM is timed to take place less than two weeks before Bounty’s scheduled AGM. Fontaine and backers are aiming to dismiss some current Bounty directors and return control of the company to Fontaine.
Fontaine is still a significant shareholder in Bounty and is backed by another major shareholder, ASX-listed Drillsearch Energy, which has been building up its stake in Bounty over the past few months.
Fontaine claims that Bounty’s existing board is mishandling exploration opportunities and in particular it has failed shareholders by selling off its 7.5% stake in offshore Perth Basin blocks WA-325-P and WA-327-P for A$1 million cash.
But current managing director Laurence Roe has said Fontaine has acted improperly and Bounty would pursue legal action against Fontaine in order to have him reimburse US$22,800 paid in relation to work he undertook at the Nyuni prospect in Tanzania.
Furthermore, in a letter to shareholders dated October 21, the bulk of Bounty’s directors, including Roe, stated: “We all oppose the re-election of Mr Fontaine as each of us believes that it is in the best interests of Bounty shareholders that Mr Fontaine should not be re-elected.”
These directors comprised four of the five members of the board, Fontaine being the remaining director.
“At a board meeting held on 20 July 2005 at which Mr Fontaine was present, the board revoked Mr Fontaine’s appointment as managing director of Bounty after it agreed that Mr Fontaine had ignored previous board directives and, in the meeting, Mr Fontaine informed the board that he would not follow a direction of the board if he did not agree with it,” the letter stated.
The four directors alleged Fontaine had provided “confidential company material to another listed company”. This company is believed to be Drillsearch.
In addition, the letter stated that under Fontaine, Bounty had lent more than A$1.5 million in two tranches to a new drilling and exploration company – White Sands Petroleum – linked with Fontaine. Bounty now holds 25% of White Sands as a result of this assistance.
