The following describes the experience of GreenSource Consultants principal Tad Simmons and a unique set of shareholder advocacy and corporate governance actions.
My view on the American way is that it stands for truth, justice, free markets, competition, rule of commonly agreed-upon law, prosperity, the successful doing so by making others’ lives better. Sustainability is a great context in which to behave that way. On the other hand, sometimes people and companies try to hide behind this good-natured business personnae primarily to enrich themselves at the unwitting expense of others. It is when greed, deceit, taking advantage of people, and strategically breaking laws (while of course trying not to get caught) become modus operandi that I know this is an unhealthy situation and much can be improved.
All that is required for evil to flourish is for good men to do nothing.
So, when a couple of my good, honest colleagues wound up on the board of a corrupt public company billing itself as a big green services & engineering company and invited me to participate, I was interested. I met with my colleagues on the board, each of whom had discovered evidence of subversion and bilking of shareholders, etc., and we looked at how the law handles such situations. It was determined we had to tell the rest of the board what we thought was going on and we would have to launch an internal investigation. As soon as the other directors got word of our intentions, they quit. I was voted on to the now two-person board to make three. Because of my background in the kinds of business the company had claimed to be involved in, and had already developed a business plan that was a good fit for this business, I was made CEO of the company.
The coming months were filled with drama, legal threats, some successes and some failures, and ultimately resulted in the indictment, conviction and sentencing of the former controlling person and some of his partners in crime, our success in civil court and with a shareholders’ meeting establishing control of the company. We had stopped a crime in progress that had already raised and spent over $30 million of trusting, hopeful shareholder money. Most of the time these people were inspired by the green message and talk about the growing market. Often it was money they couldn’t afford to part with.
The colleague that I started this saga with and I, once we and our team completed the first true shareholder meeting the company ever had and were thus elected as directors, finally had a chance to execute a business plan focused on revenue. He and I, however, had a difference of opinion about how things should move forward. I had resigned as CEO earlier but remained on the board and continued on as a consultant through the court cases, etc. I was promised the CEO position when all had blown over. This promise was revoked when my colleague, then Acting CEO, chose to make himself the permanent CEO. Ok, now what? My colleague wanted to stick with a plan that involved some questionable players, and I wanted a clean slate. I presented a plan to the shareholders.
My purpose all along was to restore the integrity of the green business in the eyes of the shareholders. I found myself unable to continue to influence the direction of the company. I remain a director, but one in the minority. I had little expectation that the shareholders were going to make much of their investment in this company.
As a result, I turned my attention to a couple of new projects specifically designed to give these shareholders who have been ripped of every chance of recovering their money and more. I found a way to provide them with shares in a new startup. Then I designed a strategy whereby we could duplicate their holdings in a new public company, GS Enviroservices, Inc. Many of them took us up on both of these offers and now have shares in NGEY (Purchase: $0.125, Current Price: $5.60) and GSEN (Purchase: $0 to $0.01, Current Price $0.015).
Everyone who participated in what we called the Share Duplication Program has received significant growth in equity. We will continue to do what we can to grow GSEN and GBLE to increase the value of these shareholders’ stock.