Martinrea International Inc. Responds to Claim
September 30 2013 - 8:36AM
Marketwired
Martinrea International Inc. (TSX:MRE), a leader in the production
of quality metal parts, assemblies and modules and fluid management
systems focused primarily on the automotive sector, announced today
that it had obtained a copy of the claim filed by Nat Rea, Rea
Holdings Inc. and one other person (who has not previously
communicated any concerns to the Board or senior management),
making certain allegations against the Company, certain directors
and officers, and two Martinrea suppliers. The claim has not been
served. The Company convened board meetings on the weekend to
review the claim, which raises two general sets of historical
concerns.
The first set of concerns, which comprise the bulk of the issues
advanced in the claim, were first raised in early 2011, while Mr.
Rea was still an officer and director and a major shareholder of
the Company. Matters specifically raised by Mr. Rea were the
subject of a review by the Chair of the Audit Committee, with full
access to management resources and Company records, who presented
his findings to the Audit Committee and the full Board. At the
time, Mr. Rea indicated in writing that all his concerns had been
addressed: "I am now content with the actions taken by the board as
outlined in Suleiman Rashid's report. I apologize for any
inconvenience and let's grow the business." With Mr. Rea's
concurrence, the Board determined that further steps were not
warranted.
A second set of concerns was recently raised by Mr. Rea and Mr.
Enzo Cirillo in a meeting with Nick Orlando, the Company's CEO. Mr.
Rea has advised that a tape recording was made of the meeting, but
has not responded to the Company's request for a copy thereof. The
allegations appear to involve payments totaling approximately
$250,000 made by the Company and one of its subsidiaries
purportedly for the benefit of Fred Jaekel in 2002 and 2006. The
Board was immediately notified, retained independent legal counsel
and is well advanced in a full investigation of the matters,
following which the Board will take appropriate actions.
While the claim has not been served, the Company is preparing
its Statement of Defence which it intends to file promptly.
Mr. Jaekel was the Company's CEO until February 2011. Mr. Rea
was Vice Chairman of Martinrea until June, 2012, when his
employment was terminated, he resigned as a director, and he sold
his remaining shares in Martinrea.
The Company anticipates that 2013 will be a year of record
revenues and profits. The Company's second quarter results were the
best quarterly results in its history. Management remains
singularly focused on continuing to build a better company and
enhancing value for Company shareholders. The Board will continue
to act in the best interests of its shareholders and fulfill its
fiduciary obligations.
This press release contains forward looking statements within
the meaning of applicable Canadian securities laws including
expectations on revenues and profits for the 2013 fiscal year.
Forward-looking statements are based on estimates and assumptions
made by the Company in light of its experience and its perception
of historical trends, current conditions and expected future
developments, as well as other factors that the Company believes
are appropriate in the circumstances. Many factors could cause the
Company's actual results, performance or achievements to differ
materially from those expressed or implied by the forward-looking
statements, including the risk factors discussed in detail in the
Company's Annual Information Form and other public filings which
can be found at www.sedar.com.
The common shares of Martinrea trade on The Toronto Stock
Exchange under the symbol "MRE".
Contacts: Martinrea International Inc. Rob Wildeboer Executive
Chairman (416) 749-0314 (289) 982-3001 (FAX)
Martinrea (TSX:MRE)
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