IsZo Capital Mails Letter to Nam Tai Shareholders Ahead of Upcoming Special Meeting on April 26, 2021
Urges Shareholders to Vote on the GREEN Proxy Card to Install IsZo’s Six Director Candidates and Remove Kaisa’s Allies From the Board
Reminds Shareholders the Eastern Caribbean Supreme Court Found That the Kaisa Allies in Nam Tai’s Boardroom Breached Their Fiduciary Duties When Orchestrating the October 2020 Private Placement
IsZo Capital Management LP (together with its affiliates, “IsZo” or “we”), which beneficially owns approximately 13% of the outstanding shares of Nam Tai Property Inc. (NYSE: NTP) (“Nam Tai” or the “Company”), today announced that it has mailed the below letter to its fellow shareholders ahead of the upcoming court-ordered meeting of shareholders (the “Special Meeting”) scheduled to take place on April 26, 2021. The Special Meeting will provide shareholders the opportunity to reconstitute the Company’s Board of Directors by removing a majority of the incumbents, who were found to have breached their fiduciary duties by the Eastern Caribbean Supreme Court, and installing IsZo’s six highly-qualified and independent candidates: Michael Cricenti, Cindy Chen Delano, Bo Hu, Louis Leung, Paula J. Poskon and Jeffrey Tuder. IsZo urges shareholders to visit www.FixNTP.com to learn how to vote on the GREEN Proxy Card to elect its full six-member slate.
IsZo Capital Management LP (together with its affiliates, “IsZo” or “we”) is a long-term and significant shareholder of Nam Tai Property Inc. (“Nam Tai” or the “Company”) that owns approximately 13% of the Company’s outstanding shares. We believe substantial boardroom change is urgently needed at Nam Tai after years of dismal corporate governance, perpetual conflicts of interests, poor financial performance and value-destructive capital allocation decisions. The case for change became clearer than ever after the Eastern Caribbean Supreme Court (the “Court”) found that the directors we are seeking to remove breached their fiduciary duties.
This is why we are urging shareholders to vote on the GREEN Proxy Card to reconstitute the Board of Directors (the “Board”) at the upcoming court-ordered meeting of Nam Tai shareholders (the “Special Meeting”) on April 26, 2021. The Special Meeting will provide shareholders the opportunity to vote on the following:
- The removal of four incumbent directors (Dr. Lai Ling Tam, Dr. Aiping Lyu, Professor Si Zong Wu and Dr. Wing Yan (William) Lo) as well as any new directors appointed by the Board since the conclusion of the 2020 Annual General Meeting of Shareholders; and
- The appointment IsZo’s six highly-qualified and independent candidates (Michael Cricenti, Cindy Chen Delano, Bo Hu, Louis Leung, Paula J. Poskon and Jeffrey Tuder).
Since Kaisa Group Holdings Ltd. (together with its affiliates, “Kaisa”) began taking control of Nam Tai in 2017, we believe the best interests of shareholders have been consistently disregarded by management and the Board. Kaisa’s well-documented focus on its own interests above all else has led to massive value destruction and negative returns over numerous time horizons, including one-year (-58.96%), three-year (-43.75%) and five-year (-9.68%) periods.1 The Kaisa-affiliated individuals running Nam Tai have never even provided shareholders with a credible roadmap for realizing the up to $40 per share in value that the Company’s own valuation estimates attach to its property holdings.
In any event, we believe our case for change was undeniably validated by the Court with its ruling that the directors we are seeking to remove breached their fiduciary duties when orchestrating the $170 million private placement announced by the Company on October 5, 2020.
You may recall that on September 11, 2020, IsZo delivered to Nam Tai verified requests to convene a Special Meeting from holders of approximately 40% of the Company’s outstanding shares – a number far in excess of the 30% requirement – seeking to remove and replace the Kaisa-affiliated directors from the Board (the “Requisition”). Rather than calling the Special Meeting demanded by shareholders, the Board approved a $170 million private placement, which distributed more than 16 million shares to Kaisa’s wholly-owned subsidiary Greater Sail Limited, taking its ownership from 23.9% to 43.9% of the outstanding shares, and more than 2.6 million shares to West Ridge Investment Company Limited.
It was clear to us that the private placement represented a blatant entrenchment maneuver intended to prevent boardroom change at the Special Meeting by significantly boosting Kaisa’s ownership and diluting other shareholders, so we filed a lawsuit on October 13, 2020 seeking to invalidate the private placement and protect our fellow shareholders from this egregious corporate abuse. The Court found that the Board acted for an improper purpose when initiating the dilutive transaction in October 2020. It was determined that execution of the private placement was a breach of the directors’ fiduciary duties and was undertaken to give Kaisa de facto control of the Company in response to the Requisition.
As a result of our litigation, the Court issued a judgment on March 3, 2021 that voided the private placement, exposed the Board’s improper actions and ordered the Special Meeting to be held. The full text of the judgment is available at www.FixNTP.com.
Given the Court’s findings, we believe shareholders need to ask only one simple question when deciding how to vote at the Special Meeting. Why would any shareholder not named Kaisa support the continued service of Dr. Tam, Dr. Lyu, Professor Wu or Dr. Lo on the Board after they breached their fiduciary duties and attempted to give Kaisa de facto control of the Company at the expense of all other shareholders?
THERE IS FINALLY A CLEAR PATH TO FIXING NAM TAI: VOTE TO INSTALL THE ISZO SLATE
IsZo has recruited an ethical, high-integrity group of director candidates with deep real estate expertise, extensive business experience in China, proven management and board service pedigrees, and strong capital allocation and transaction acumen. Importantly, unlike the incumbent directors IsZo is seeking to remove, none of IsZo’s director candidates have been found guilty of breaching their fiduciary duties.
Our six-member slate also has a strong vision for improving governance, ending conflicts of interest and self-dealing, and implementing a disciplined capital allocation approach. By adding our candidates to the Board alongside incumbents Peter R. Kellogg and Mark Waslen (who were found by the Court to be independent and not to have breached their fiduciary duties), shareholders can finally trust that Nam Tai has a diverse, independent and qualified Board that is committed to acting in the best interests of ALL shareholders.
We encourage shareholders to visit www.FixNTP.com to learn more about our director candidates. The website also includes important instructions on how to vote for change on the GREEN Proxy Card.
We look forward to your support.
IsZo Capital Management LP
Vote the GREEN Proxy Card to install IsZo’s full slate of director candidates to promptly restore credibility and integrity in Nam Tai’s boardroom.
Please visit www.FixNTP.com to review our letter and learn how to vote on the GREEN Proxy Card.
1 Total shareholder return figures account for dividends reinvested and run through the close of trading on May 26, 2020 (the day before IsZo issued its first public communication to Nam Tai shareholders).
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