FAILED TO HAVE QUORATE AUDIT COMMITTEE, & FAILED TO REPORT
The JVAG Report draws attention to the situation which arose in Nov/Dec 1998 with the resignation of Gary German as Director, leaving Java Gold Corporation in breach of the statutory requirements for having an Audit Committee:
"...shall have an Audit Committee composed of not less than three directors of the corporation, a majority of whom are not officers or employees of the Corporation or its affiliates." - Subsection 1 of Section 171 of the Canada Business Corporations Act
with the lack of replacement of Gary German, Java Gold Corporation lost its legal basis for having an Audit Committee on TWO counts:
1. Only 2 directors, but at least 3 required for Audit Committee
2. No longer a majority who were "not officers or employees" - Armand Beaudoin was an officer, Andrew Chater was not, so 50:50 which is not a majority.
The JVAG Report is critical of Armand Beaudoin and Andrew Chater for not making a replacement and for not notifying shareholders and regulators that the Company was now no longer able to comply with the law regarding internal auditing. The situation was never corrected.
The resignation of Andrew Chater on 22nd January 1999 further worsened the situation, and the JVAG Report criticises Armand Beaudoin for not making the 2 replacements so that the company could achieve the legal minimum for internal auditing.
Once again,this indicates that anyone who took an investment decision regarding JVAG stock after Nov/Dec 1998 in the belief that the corporation had an Audit Committee may have a claim, and should seek appropriate qualified professional legal advice.
Robin Grayson
Author of The JVAG Report
General Director of Eco-Minex International Co Ltd |
