Coquitlam, British Columbia-based Western Wind Energy, an owner and developer of wind energy projects, has plans to launch a series of countersuits against Pacific Hydro Ltd. of Australia seeking compensation and damages in excess of $1 billion.
As of Jan. 27, 2006, Pacific Hydro owned 25.2% of Western Wind Energy's issued capital after acquiring 6 million common shares and six million share purchase warrants, giving the company sole voting control over all matters.
At Western Wind Energy's most recent annual meeting, held on Sept. 25, 2006, Pacific Hydro exercised its voting rights by voting down a resolution to modify the stock option incentive plan rewarding employees and consultants of Western Wind Energy. According to Jeff Ciachurski, Western Wind Energy's chief executive officer, this action exemplified that Pacific Hydro is trying to gain control of the company without paying out its shareholders.
Western Wind Energy's directors and shareholders even reduced Pacific Hydro's voting rights from 25.2% to 19.99% – but Pacific Hydro demonstrated at the meeting that it could vote down any measure, at its sole desire, even at 19.99%.
According to Pacific Hydro's Oct. 26, 2006, statement, the company is suing Western Wind Energy because it did not hold up its end of the Exclusivity Deed, stating Pacific Hydro owns 25.2%. Consequently, ‘Pacific Hydro is exercising its right to require the repurchase of the units by WWE,’ according to the release.
Western Wind Energy says there is no law that states it has to buy back its shares. Therefore, the company is countersuing Pacific Hydro based on the Sarbanes-Oxley Act of 2002.