IsZo Capital Issues Letter to Nam Tai Shareholders Regarding its Slate’s Strategic Vision - Seite 2
Shareholders should recognize that Nam Tai’s announcement pertaining to Mr. Kwok’s departure is only the latest in a string of contradictions and misrepresentations that the Company has disseminated. While Nam Tai will now likely claim that it is embracing shareholder feedback and taking steps to enhance value, we question how any shareholder can have faith in what remains a Kaisa-controlled Board. We contend the Company’s recent communications, including its August 5th press release, feature a litany of misleading statements that completely impugn the Board’s credibility, including:
- We question how Nam Tai claims to be “implementing differentiated strategies to promote business growth and create value for shareholders.” The reality is Nam Tai’s strategies have produced negative TSR over every relevant time horizon, including one-year (-58.96%), three-year (-43.75%) and five-year (-9.68%) periods.2 Material share price appreciation only began this year following IsZo’s public engagement in the spring.
- We assert that Nam Tai’s commitment to “integrity and good corporate governance” is an empty one. In our view, Nam Tai’s leadership undermines the meaning of the word “integrity” when it fails to engage with shareholders, buries material disclosures – such as the Dongguan City investment – in one line of a lengthy regulatory filing and packs the Board with individuals connected to Kaisa.
- We believe Nam Tai has brazenly ignored shareholder feedback by touting its focus on “project diversification.” It is abundantly clear that investors are incensed by the Company’s opaquely-communicated investment in Dongguan City and vehemently oppose the allocation of capital to any new projects, especially while the Company’s shares trade at a staggering discount to intrinsic value.
- We find it absurd that Nam Tai claims its linkage with Kaisa creates a favorable “reputational and branding effect” for the business. Kaisa has a well-documented and highly-publicized record of defaulting on financial obligations, mistreating investors and facing legal issues in the People’s Republic of China.
Nam Tai’s lack of credibility and disregard for shareholders’ interests to date only reinforces the urgent need to convene the Special Meeting. We urge the Company to avoid stalling or manufacturing unnecessary delays by promptly scheduling the Special Meeting that a critical mass of shareholders – including one of the Company’s own Board members – has demanded.