Elliott says Arconic's press release fails to answer shareholder questions
Elliott Management, which manages funds that collectively beneficially own a 13.2% economic interest in Arconic sent a letter to the Arconic Board demanding a full, fair and independent accounting of the secret vote-buying agreement that was only disclosed for the first time on March 13. Elliot continued, "The company's press release, which announced that the voting lock-up had been waived, fails to answer shareholders' existing questions and raised new questions that demand answers. In its letter to the Board, Elliott provided a list of questions that, at minimum, shareholders deserve answers to. Elliott also called for the immediate dismissal of those found to have been responsible for the illicit vote-buying deal." The letter said in part: "Last Thursday, we sent you a letter detailing management's diversion of corporate assets for its own benefit related to a vote-buying agreement that was deliberately concealed, likely in violation of applicable law, from the company's shareholders for the better part of a year...This morning, in a brief statement, the company announced it would waive the provisions of that agreement. This is a necessary step, but it is hardly sufficient. The problem with the Secret August Voting Lock-up wasn't just that it affected the company's upcoming proxy contest, but that it looks to have been contrary to law, contrary to the company's own Code of Ethics, and contrary to the fundamental principles of shareholder trust. In executing the vote-buying agreement, management traded shareholder value for votes promoting its own entrenchment and that of the Board. The Board cannot simply "waive" the terms of the agreement and act as if nothing implicating management integrity ever happened. ..In our letter last week, we expressed our disbelief - which we know is widely shared by other Company shareholders - that the Board could possibly have been made aware of or approved of this arrangement or the efforts undertaken to cover it up. Today's statement, though lacking in detail, seems to confirm our belief. But unfortunately, today's statement also suggests the Board is not treating these illicit dealings with the necessary gravity. It cannot be the ongoing responsibility of the shareholders to police management misconduct"