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Letter to the Chairman of the Nyrstar Board of Directors

In this letter, RSQ investors calls on the Chairman of the Board of the company to comply, together with his fellow Board members, with the Code of Conduct of the Company by providing full transparency on the conditions under which the operational activities of the Company were transferred to Trafigura, and to postpone a decision to liquidate the company until such full transparency exists.



To the attention of Mr. Martyn Konig, Chairman of the Nyrstar Board of Directors.


Mr. Chairman,


We call on your personal ethics and the ones of your fellow Board members. At the General Meeting of the shareholders on November 9, 2019, you vehemently made repeated statements that you consider yourself to be a man of the highest ethical standards and standing. There could be no doubt.


The Nyrstar code of (business) conduct[1], still on display on your company’s website, states that the Nyrstar values are, amongst other, the values of respect, integrity and ownership. The code is explicitly said to ‘be seen in the context of good corporate governance which will impact the nature of our roles’. It is the set of behaviors and rules by which Nyrstar, according to such code, is to be properly managed, and controlled, resulting in increased transparency and accountability. The Nyrstar code continues and states explicitly that it also governs the relationships between the Board and the shareholders. Explicitly, the Nyrstar Code furthermore states that ‘we act in the best interests of our shareholders’.


Nyrstar, as a Belgian listed company, is also bound by the 2020 Belgian Code on Corporate Governance. In its most recent version, the Belgian Corporate Governance Code calls for responsible and ethical leadership by the Board and that the Board should develop an inclusive approach that balances the legitimate interests and expectations of shareholders. The updated Belgian Code, which is of compulsory (!) application to Nyrstar, contains ten principles as essential pillars of good governance. Conformity with the Belgian Code on Corporate Governance is to be assessed with respect to both its letter and its spirit. The Board should ‘promote responsible and ethical behavior’. All Board members should, according to such Code uphold the highest standards of integrity and probity, meaning the quality of having strong moral principles, honesty and decency. It is the duty of the chair, according to the Belgian Code, to ensure effective communication with shareholders and that board members develop and maintain an understanding of the views of the shareholders, as it is also the chair’s responsibility to build consensus.


On purpose, we start with reference to these compulsory Code and ethical commitments, as they are not only to be seen and read as binding legal commitments regarding transparency and good corporate governance, but as they explicitly are to be seen as personal commitments of your own and your fellow Board members. Such personal commitments to respect the highest standards must be called upon now at the company’s most crucial crossroad: its continuation or dissolution. It is with regret that we feel obliged to have to invoke these ethical and behavioral principles and commitments. Frankly, we would have expected them to be self-evident and to have been applied as matter of sound wisdom in these times by the Nyrstar Board under your chairmanship. We would have expected that you and your fellow Board members would have been extra considerate and sensitive to such considerations of ethical and behavioral nature, in particular in respect to your minority shareholders. But we are at great difficulty finding much, if any trace of such wisdom or ethical consideration in the convocations sent out for the month of June. And so, we will feel obliged to have to hold you and your fellow Board members (again) personally responsible, accountable and liable for not meeting any and all of the applicable legal and ethical responsibilities and commitments.


Now, let’s turn to the convocations of General Meetings to be held on June 2nd, 2020 and the Extraordinary General Meeting for June 30th, 2020 set up to dissolve the company.


Just before the outbreak of the Corona pandemic, the Nyrstar Board decided to postpone the General Meeting and thereby, in its motivation to do so, referred explicitly to (the interests of) the minority shareholders. Looking at the newly called convocation, the reference to the minority shareholders has completely disappeared in the Nyrstar Board’s motivation. To the opposite, the Nyrstar Board’s consideration for minority shareholders’ rights and their interests have been reversed and are more restricted than ever and done in a disproportionated manner, so totally lacking proper balance. As a result, they are without any precedent. The Nyrstar Board of directors has made use of the extraordinary exceptional legislative temporary COVID19 framework but did so without any prior consultation of the minority shareholders. It claims to have done so out of sanitary concerns, but thereby apparently did not consider or retain any and all of the existing possible alternatives for a General Meeting to be held, if any had to be held, nor did the Board consult hereupon the minority shareholders or at least the second largest shareholder.


The Board of Nyrstar did not seem to exercise any restraint on itself to curtail the rights of participation of minority shareholders at a General Meeting for the month of June. It seems that you and your Board thought that the special times had given you a kind of free reign to go all the way, as it could please you most. Without any restraint of legal or ethical nature for yourselves but with the aim of restraining minority shareholders to the maximum extent possible in the exercise of their shareholder rights and this based on the technical prima facie reading of the exceptional COVID19 legislation.


How else than purely abusive is such convocation then to be considered as its result, if not its aim is to restrict in every possible way a proper debate between the Board and shareholders, as shareholders cannot be present at the meeting. While any Board of any company, and for sure any listed company must for sure be perfectly aware that allowing for actual debates on crucial matters like the dissolution of the company could never have been more required in the history of the company. So, you should not be surprised when ethical questions arise, like for instance: What about you living the Nyrstar own Code’s values of integrity and respect? What about you applying the Nyrstar Code’s and the Belgian Corporate Governance Code principles, aims and intentions of good corporate governance?


How does this convocation in any legal and ethical way conforms and complies with for instance Principles 8.2 and 8.3 of the Belgian 2020 Code on Corporate Governance? Such principles of such Belgian Code require compulsory for a listed company that all necessary facilities are made available and that the company should ‘encourage the shareholders to participate in the general meeting of shareholders and provide for communication technology in this respect, to the extent necessary.’


Any claim that the way the Nyrstar Board made this convocation would have to be considered as the only way a listed Belgian company can hold its General Meeting of shareholders under this extraordinary temporary legislation is to be seen for what it is, a misrepresentation of reality.


Actually, there are and will be many other examples where the Board of Directors of other listed Belgian companies will go to great lengths during the period of exceptional COVID19 measures to create an environment for a proper actual debate between the Board and the shareholders and an actual participation by all shareholders, in particular the minority shareholders. The Nyrstar case will rather stand out as the bad, some would simply say abusive usage of the temporary COVID19 legislation. To further add insult to injury, the matters to be decided upon and to be discussed are of the very essence in the life of a company, namely its possible dissolution. This on and by itself requires the Nyrstar Board to give all and any possible consideration for all shareholders to be able to participate in a proper deliberation and resolution at a General Meeting of shareholders. Do we need to remind you the VBO/FEB Corporate Governance Code requires ‘for companies with one or more significant or controlling shareholder(s), the Board should encourage these shareholder(s) to make a considered use of their position and to take special care to prevent conflicts of interests and to respect the rights and interests of minority shareholders’. Mr. Konig, it is your duty as the chair to see to it that the Nyrstar Board acts the proper way.


One would think that the Board of a listed company would think twice before trying to rush such a decision through a governance process in a pandemic time and period and hesitate to do so while there are pending most serious shareholders’ disputes in court. One would think that the Board of Directors of a listed company would take special care and would do its utmost best, even in COVID19 times, to give all shareholders the right to be present and to actively participate at such meeting, in particular when such an important and contested item as the potential dissolution of the company is to figure on the agenda. The Board and its chairman must act in the best advisable and the most legitimate interest of all shareholders; considering also their own ethical and legal director responsibilities, their own Board duties under the Law and the applicable codes of Conduct and the commitments they made to their shareholders.


Mr. Konig, it is your responsibility with your fellow Board members to get the best and most well-thought and balanced legal advice and counsel, taking into account all applicable rules and standards in a given situation and this foremost in the interest of the company, all its shareholders and actually also for yourself. We and the many people that we have spoken to in the wider circles of society and business are of the strong opinion that the current convocation does not meet the legal, ethical and other applicable standards required to observe by a Board of a listed company for the situation at hand.


We would like to remind you and the Nyrstar Board that the temporary COVID19 legislation regarding the convocation of a (extraordinary) General Meeting of shareholders does not provide a company with a free license to act at free will and impose any sort of agenda and create an unwarranted, unjustified and unprecedented framework of restraints or measures on its shareholders. To the contrary, the extraordinary times we all live in requires special care to be exercised also in the context of the COVID19 exceptional legislation. Such legislation and Royal decree must be read and applied with a very special duty of care, especially for a public listed company, appropriate for the special times we live in and in consideration of the matters being discussed.


We urge you to re-consider this decision on the convocation, both its timing, its proposed manner and its agenda setting and in making sure that all relevant material is fully and timely made available.


We submit to you that the month of June is not yet a good moment for having such General Meeting, given that minority shareholders were not asked for their opinion on this crucial matter, given that a number of key documents are still missing, such as the requirements on submitting consolidated audited accounts at the date when the expropriation by Trafigura occurred (read in this particular respect, inter alia, again your own code of conduct on financial disclosure and the VBO/FEB Corporate Governance Code)[2], such as the fact that physical gatherings are and remain possible and permissible by decision of the Belgian Authorities and considering that shareholder disputes in court are still without proper outcome.


We look forward to your decision to not further jeopardize the legitimacy of such gathering of shareholders at this stage and to do the right thing, because our group of minority shareholders, representing the second largest stake in your company, is disputing the validity of the convocation as this is an abuse of rights.


We therefore ask and request you to withdraw the current convocations and postpone the currently envisaged General Meetings until at least (i) a normal Ordinary General Meeting can be convoked and held in the presence of all shareholders, who wish to do so and that actual debates and deliberations can take place, (ii) the consolidated, audited accounts per July 31, 2019 are available and/or (iii) until full satisfaction is given to us, minority shareholders, on the information we seek through current summary court proceedings and the items we want to see added to the agenda.


You will understand that your own personal responsibility and the one of your fellow Board members is more than ever at stake. Disregarding our request will be considered as nothing else than a deliberate decision to disregard the request of your second largest shareholder. Such second largest shareholder will be left with no choice but to consider your decision to be an act in blatant disregard of your own commitments to all your shareholders and a continued attitude to willingly and knowingly violate your obligations and duties under the Law, the principles and rules of good corporate governance, your own Nyrstar Code of Conduct and the Belgian Corporate Governance Code 2020.


May we ask you to provide your answer by May 15th?


With kind regards,


RSQ Investors, division of Quanteus Group BV


[1] https://www.nyrstar.be/~/media/Files/N/Nyrstar-IR/documents/footer/COC-English_A5Booklet.pdf


[2] “We build trust with the investment community by providing full and accurate information in our public disclosures about Nyrstar’s financial condition and results of operations, and by maintaining the integrity, accuracy and reliability of Nyrstar’s accounts, records and financial statements.”



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