Audacious bid to replace Avocet management revealed

 by EWAN LAMB

Hundreds of investors in the Avocet 'disruptive technology' group are being urged to support a move which would see the bosses of the business, including chairman Martin Frost, replaced by a new slate of directors at an annual meeting scheduled for August.

Details of the so-called Proposal for Shareholders of Avocet Natural Capital (ANC) PLC have been outlined in a lengthy post on the internet Forum which invites those with a stake in the company to comment on issues affecting them. The perceived lack of progress in bringing products to market under Mr Frost's six-year tenure has been a recurring theme on that Avocet forum.

Just like the mystery investors who Mr Frost says are purchasing the firm's intellectual property (IP) for hundreds of millions of dollars, the identity of the author of the new proposal is not undisclosed. He or she uses the title FDF, and it seems the individual has a firm grasp of business practice.

The Forum post opens by setting out the background which has resulted in the proposed replacement of the management team.

The writer states: "On Tuesday, November 3rd, 2020, Martin Frost and Bob Jennings, the sole Directors of Avocet Natural Capital Plc., decided that ANC Plc should be dissolved and that “ANC Plc’s net assets be realized and these funds be returned to ANC Plc shareholders.” (MF – November 4th, 2020).

"On March 20th, 2021, after having advised us that that the sale of a significant piece of the ANC IP was to be concluded shortly at a price of US $100 million (£72 million), Frost provided the shareholders with a long list of deductions that he intended to unilaterally take from the proceeds. The planned deductions include such things as a US $10 million (£7 million) “contingency fund” for Frost’s use and a £5 million legal fund for Frost to pursue his personal enemies."

According to the post: "This is directly contrary to his commitment that the proceeds were to be distributed to the shareholders."

'The Proposal' is then set out in great detail.

"On May 3rd, 2021 it was announced that the Avocet Natural Capital Annual General Meeting will be held in August. Given Frost’s clearly stated intention to withhold significant funds from the shareholders – an action that is unmistakably directly contrary to the commitment that he previously made to distribute all of the proceeds - at that meeting an alternate slate of Directors will be proposed for your consideration."

These new directors would, it is claimed, have a single aim - to maximise the amount of money paid out to Avocet shareholders.

Not Just Sheep & Rugby now details in full the ten point policy platform on which the replacement Board would operate:

"1- To immediately cancel the Frost "contingency fund" and distribute its US $10 million (£7 million) contents to the shareholders.

2- To immediately cancel Frost's plan to have ANC fund numerous lawsuits against his personal enemies and distribute the £5 million allocated for this purpose to the shareholders.

3- To investigate and, if at all possible, cancel the very questionable US $5 million (£3.6 million) "option negation fee" to be paid to Gennfros, and instead, distribute those funds to the ANC shareholders.

4- To investigate Frost's claim that he and Jennings are owed a substantial amount of money by Avocet IP, and if untrue or unverifiable, distribute the £6 million that they are claiming to the shareholders.

5- To investigate the "guarantee" that Frost claims that he and (his wife) Janet are owed by ANC regarding their personal debt guarantee on the farms, and, if possible, deny the claim and distribute the £4 million that they are claiming to shareholders.

6- To verify all creditor claims related to the proposed $20 million (£14.4 million) in payments to be made to Avocet IP Limited, Omega Infinite and “Ireland and Italy”, before any such payments are made.

7- To use their best efforts to collect the £6.6 million in principal and interest that Frost personally owes to ANC for the ANC shares that he had issued to himself, that he subsequently voted, but that he has never paid for, and distribute those proceeds to the shareholders.

8- To investigate the transaction whereby ANC purchased from Frost a £10 million debt in exchange for 10 million ANC shares - a debt which Frost just months later acknowledged was worthless. (Note: If it is determined that these shares were improperly issued, because of the resulting decrease in the total issued shares, this would increase the legitimate shareholders’ proportional share of all distributed funds by +20%).

9- To hire a patent attorney with a background in chemistry to provide an independent assessment of the remain Avocet IP to determine if it has any real value and if it does, to assign said IP assets to a broker for sale on an expedited basis with the proceeds to be distributed to the shareholders as soon as practical.

10- If between now and the date of the General Meeting, the current directors pay out any of the funds listed in points 1 to 6 above and, after careful review, the newly-elected Directors feel those pay-outs to be improper, the Directors pledge to take any-and-all such actions as are necessary to recover said funds."

FDF's post goes on to say: "A small number of very qualified individuals (both shareholders and non-shareholders) have already been approached and the majority have expressed an interest in serving. However, in sharp contrast to what has occurred during Frost’s seven-year tenure, your opinion as to who you believe might be an appropriate candidate is being actively sought.

"The potential directors that we have had initial discussions with thus far have found the proposed remuneration plan to be very attractive. While they realise that they will only get paid if they are able to deliver concrete results for the shareholders, after reviewing Frost’s proposed plan, they are very confident that they can do so."

An indication is then given that shareholders will be contacted privately to find out if they will support the proposal to increase pay-outs to investors.