ARAKIS: HIGH RISK OIL PLAY (AKSEF) Message Board

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Gold/Mining/Energy : ARAKIS: HIGH RISK OIL PLAY (AKSEF)

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To: Zeev Hed who wrote (6250)	6/19/1997 6:23:00 PM
From: Pluvia	of 9164

Zeev, If you check the NASD regulations several new rules have been adopted for small cap listing -- they include ~ Independent board members -- see NASDAQ market place rules for a full description of definition "Independent" ~ Audit Review committee -- made up of independent board members which review conflict of interest situations and audit transactions -- income/expenses etc. The purpose for these new regulations is to eliminate transactions such as making personal loans to company officers. The purpose is also to protect shareholders from breaches of fiduciary responsibility and miss-appropriation of funds. <<<Steve: I do not know the Canadian laws, but in this country Board of Directors are allowed to use loans (or even bonuses which is cash that need not be repaid) as incentives for its executives. >>> Zeev, you seem to be implying that the nature of the loans made by KAHN and McLeod are "ok" -- perhaps you can explain how these loans were not a breech of fiduciary responsibility? The loans must be in the best interest of the company -- help me out here -- how is the company benefiting? Are you suggesting officers of Arakis have no fiduciary responsibility? Why is there no explanation of the loans in the last filing? This would never pass scrutiny of any reputable accounting firm. In addition, generally there is language in offering filings stating the proceeds will be placed in government interest bearing instruments <or something to this effect> -- I'll bet the last equity offering contains that language. If this language is present this loan could potentially be a violation of the last offering filing. I wonder how the TSE would feel about that? Zeev -- please help me out here, how can the KAHN, McLeod loans be anything but a breach of fiduciary responsibility -- at the very least? Cheers Steve

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