South Australian developer-publisher Mighty Kingdom has asked the Australian Takeovers Panel to restrain Gamestar, its major shareholder, from voting shares at its upcoming annual shareholder meeting.
According to reporting from the Herald Sun, Mighty Kingdom alleges that Gamestar, founded by Adelaide businessman Shane Yeend, “continues to make false and misleading statements to the market.” It also says that both Gamestar and an associated company, Imagine Entertainment, have failed to lodge shareholder notices that include “details of their alleged association”. Yeend appears to be the director of both companies.
Yeend, it appears, is attempting to roll the Mighty Kingdom board, chaired by former ABC managing director Michelle Guthrie. Following the publication of a November 20 letter to shareholders from the Mighty Kingdom board explaining its disappointment with the Gamestar partnership, Yeend fired back with an explosive letter of his own, alleging mismanagement and citing a desire to “end the tragic mess Michelle Guthrie has overseen since listing”.
Gamestar committed to a $4m contribution to a $7m capital raise by Mighty Kingdom in August last year. $2m of that contribution remains unpaid because Mr. Yeend asserts that the conditions for the full contribution have not been met. Mighty Kingdom disagrees.
According to the Hun, Mighty Kingdom told the Takeovers Panel that Gamestar missed payments for the shares in February and April, but intends to vote all its apparent shares — reportedly 30.5% of MK’s issued capital — at the upcoming annual meeting.
“The Company unequivocally rejects the characterisations and assertions made in Mr Yeend’s communications,” reads Mighty Kingdom’s letter to shareholders. “Shareholders should not rely on Mr Yeend’s comments, and to do so would be to act on misinformation.”
Yeend’s response letter drops several bombs, stating that an extraordinary general meeting has been called to address his grievances. In addition to stating his feeling that MK makes bad games, he asserts that he is prepared to bring an end to Mighty Kingdom if he must.
“If we don’t get the outcome we want for all shareholders we will fight until Mighty Kingdom is in liquidation, and nobody wins then except me,” writes Mr. Yeend. “But I want us all to win.”
“We have not paid for 50 per cent of the shares because of their actions, although we tried to accept these issues and continually find a way forward until it was untenable.”
“The core issue behind the rhetoric is simple; MKL makes bad games that don’t make money and the world has told us that.”
Mr Yeend goes on to brand Mighty Kingdom leadership as “snake oil salesmen, liars and cheats.”
The Takeovers Panel is yet to make any decisions or recommendations. We’ll keep you updated.
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