Legal Proceedings
08 April 2003
8 April 03
Legal Proceedings
On 4 April 2003, IT Capital Limited (“ITC”) was served with two sets of legal proceedings. Both sets of proceedings relate to Deep Video Imaging Limited (“DVI”) and the plaintiff is Power Beat International Limited (“Power Beat”). Power Beat is a minority shareholder in DVI.
In the first set of proceedings, IT Capital Limited is one of five defendants. The other defendants include DVI Investment Company Limited (a wholly owned subsidiary of ITC) and an ex-officer of ITC, although we understand that the ex-officer has not yet been served. The claim relates to the basis upon which ITC (through DVI Investment Company Limited) acquired its 371,727 shares in DVI. Power Beat seeks return of 371,727 DVI shares that it sold to ITC in May 2000 and further unspecified damages.
The matters complained about by Power Beat took place between October 1999 and May 2000. None of the current directors or management of ITC are a party to the proceedings. ITC is investigating the allegations made and at this stage is of the view that the claims are without merit. ITC will vigorously defend the proceedings.
The second set of proceedings relate to alleged oppressive conduct against Power Beat in its capacity as a minority shareholder of DVI. ITC is one of six defendants.
Power Beat is seeking an interim injunction preventing any proposed change in the constitution of DVI and preventing a proposed issue of shares by DVI. The substantive proceeding by Power Beat seeks further orders directing the disclosure of certain information regarding the affairs of DVI, the setting aside of convertible notes that have been issued by DVI, preventing the amendment of the constitution of DVI and preventing any capital restructuring of DVI.
ITC considers that the claims of Power Beat are without merit and will vigorously defend those proceedings.
ITC also advises that DVI has issued certain convertible notes ($4,900,000) and “on demand” loans ($920,000) to non-ITC interests. To date, the convertible notes have not been converted into shares. They are the same convertible notes that Power Beat is seeking to set aside in the second set of proceedings referred to above.
