Genesis Research directors quit due to lack of funds & communication

Tuesday 13th November 2012

The chairman and three other directors of Genesis Research and Development have resigned after concluding they can't continue to run the company because of a lack of funds and lack of communication from major shareholders UBNZ Funds Management and Delight Grace.

"The board believes that it has become necessary for the company to be placed in voluntary liquidation by the shareholders and for any remaining assets to be realised and/or distributed pro rata to shareholders," chairman Joachim von Roy said in a statement.

The board can't do that without a special resolution of shareholders or court order but lacks the funds for either option. UBNZ, which also holds convertible notes, could appoint a receiver as a secured creditor, but it hasn't given any indication of its plans, von Roy said.

Von Roy and independent directors Andrew Gearing, Daniel Mahnert-Lueg and Steven Gillis resigned from the board, leaving Catherine Yan as sole director. Yan joined the board in July after a placement of 9.1 million shares to Delight Grace.

Yan "will have to consider the future direction of the business, including appointment of further directors, maintaining solvency and compliance with listing requirements on NZX and ASX or seeking shareholder approval for delisting," von Roy said.

UBNZ took a 16 percent stake in Genesis in mid-2010 via a private placement but communications broke down a year later when former UBNZ principal May Wang was charged by the Hong Kong Independent Commission Against Corruption with giving bribes of HK$73 million. Fellow UBNZ principal Jack Chen was also arrested.

The company suspended operations in May 2010 and laid off its entire staff. In July this year the placement of 9.1 million shares to Delight Grace was said to give it enough funds to remain listed while it considered further investments.

The shares last traded at 1.8 cents, valuing the company at $980,000, and have declined 40 percent in the past year. They were halted yesterday while the directors considered their options.

In July, Genesis called off a proposed merger with Australia-based Mariposa Health, an unlisted public pharmaceutical development company. In today's statement, it said the merger failed because UBNZ "failed to waive its rights under its security agreement to enable the merger proposal to proceed."

"Genesis has insufficient funds to continue, even as a non-operating investment entity," it said.

It had sought to continue in existence in the hope of realising funds in its investment with Real Time Genomics.

BusinessDesk.co.nz

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