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Gold/Mining/Energy : YBM Magnex Intl Sees Revenue Growth 30-35%/Yr In MagnetOp -- Ignore unavailable to you. Want to Upgrade?

To: Arcane Lore who wrote (257)	9/10/1998 8:34:00 AM
From: Adrian du Plessis	Read Replies (1) \| Respond to of 314

Monitor sought for YBM as hope ends for deal By SANDRA RUBIN The Financial Post Thursday, September 10, 1998 Any chance of a deal between embattled YBM Magnex International Inc. and its powerful institutional investors collapsed yes- terday, amid warnings shareholders are looking at installing a monitor or receiver inside the company to prevent any troubling new transactions. The shareholders, led by Vancouver-based Connor Clark & Lunn Investment Management, have notified YBM they'll call a special shareholders meeting to remove the board of directors if YBM doesn't call one by next week. The two sides had been trying to negotiate an amicable arrangement but kept butting heads over a variety of issues - including how soon a meeting must be held. "We're not going to do a deal," Toronto-based shareholder adviser Wesley Voorheis said after the 5 p.m. deadline passed with no phone call. He expects YBM to make the next move. "I believe they'll call a meeting themselves because they want to be in control of the process. My suspicion is they don't want to do a deal with us because they don't want to let us in on the inside. They want to be in control for as long as they can." Shares in the Philadelphia-area magnet manufacturer - a former member of the Toronto Stock Exchange 300 index - haven't traded since FBI agents swooped down on its headquarters May 13 in an organized-crime probe. YBM has also been unable to find new auditors since Deloitte & Touche LLP walked out in June without signing the 1997 financial statements. Voorheis said frustrated institutional investors, who own about 50% of the outstanding shares, are determined to seize control and install their own slate of directors when a meeting is finally held. But they may turn to the courts and ask that a receiver or a monitor be installed in the meantime to stop YBM from stepping up its business in Eastern Europe. "They have disclosed to us some possible transactions which, if they go ahead with them, we will try and stop," said Voorheis, a principal in VC & Co. "I don't know if they're going to go ahead with them but they're on their plate, and have been discussed with us. "They involve increased activity in Eastern Europe - and that's not on for us." Before it quit, Deloitte wrote to YBM expressing concerns about "the validity of certain contracts, entities and individuals," and demanding a special forensic audit of the company's eastern European operations. The report of Pinkerton Investigation Services has not been made public, but an independent committee of YBM directors said it had uncovered no evidence of criminal activity by the company or its employees. Voorheis said installing a receiver or a monitor to keep an eye on things would take some of the pressure off a quick meeting, but he warned the shareholders are in no mood for a long delay. He said the company is already in violation of its legal obligation to hold a meeting within 15 months of the last one. YBM had a market capitalization of almost $1 billion in March before reports of its troubles eroded that by a third. It was worth about $635 million when the shares last traded.