Concerned Shareholder of CF Energy Corp. Announces Mailing of Information Circular and Proposed Nominees for Board of Directors

TORONTO, Oct. 15, 2020 /CNW/ - 11882716 Canada Inc. (the "Concerned Shareholder") today announces that it has filed its information circular (the "Information Circular") and related materials (collectively, the "Meeting Materials") under the CF Energy Corp. ("CF Energy" or the "Company") profile on SEDAR at www.sedar.com. The Meeting Materials have been mailed to the Company's shareholders (the "Shareholders") in connection with the annual general meeting of the Shareholders (the "Meeting") of the Company that will be held on October 29, 2020 at 10:00 a.m. (Toronto time).

Vote FOR Long-Term Value Creation at CF Energy Corp. ? Vote FOR the New Slate of Directors

On February 22, 2019, CF Energy Corp. announced that Mr. Huajun Lin, the Company's Founder, Chief Executive Officer, Chairman, and controlling Shareholder, would resign from his positions with the Company due to health reasons. In the same press release, the Company's board of directors (the "Board") announced that Mr. Lin's daughter, Ms. Ann Siyin Lin, had been appointed by the Board as the new CEO and Chair of the Company, without any description as to the process undertaken to identify a new CEO and Chair of the Company.

Since the resignation of Mr. Lin and the appointment of Ms. Lin as CEO and Chair, the Company's share price has steadily declined. A mere glance at a graph of the Company's stock price since Ms. Lin's appointment reveals that the Company's declining share price is not attributable to the COVID-19 pandemic. Rather, this steady trend of value destruction is reflective of the inability of the current Board and management to lead CF Energy toward continued success. It is my belief that Ms. Lin is not qualified to lead CF Energy and that the Board has failed in its responsibility to act in the interests of ALL Shareholders by apparently forgoing the search for a qualified CEO and Chairman in favour of appointing the daughter of the Company's controlling Shareholder to lead CF Energy.

CEO suspected of forgery and intentional non-cooperation in the Lin estate dispute

Multiple witnesses have testified that the signature on the will submitted by Ms. Siyin Lin was forged. According to the statement made on behalf of Ms. He Mingfei by her counsel (an unofficial translation of which is attached as Appendix A.1 to the Information Circular, with the original statement attached as Appendix A.2 to the Information Circular), during the course of the litigation, Ms. Lin submitted a will, purported to be that of Mr. Lin, to the court where multiple witnesses have testified on the forgery of Mr. Huajun Lin's signature.  Furthermore, and again according to the statement of Ms. He Mingfei, it appears that Ms. Lin has purposely prolonged the litigation by refusing to cooperate with the court's efforts to determine the precise number of shares held by Mr. Lin's estate. The Concerned Shareholder is suspicious of Ms. He Mingfei's action since the management circular of 2019 had established the precise number of shares held by Mr. Lin's estate to be  "34,683,500" and so the Concerned Shareholder believes that unless the estate has been inappropriately managed and accessed by Ms. Lin or other parties, the number should have remained the same this year as well. Indeed,  according to the statement of Ms. He Mingfei, her and her legal counsel have the intention to take future legal actions against Ms. Lin for any of her legal responsibilities in regard with the forged documents in the inheritance dispute case.

Forgery is a serious failing of private and public morals. Especially where the subject of the allegations is the Chair, CEO and Secretary of a publicly traded company. Further, this familial infighting surrounding a control block of CF Energy's shares and involving the Company's CEO and Chair is a distraction that the Company cannot afford and causes uncertainty regarding the future direction of the Company.

Ms. He Mingfei and Mr. Zhipei Lin, who will inherit the majority of Mr. Huajin Lin's Estate, are in full support of the Concerned Shareholder Nominees (the "Nominees")

According to the statement made on behalf of Ms. He Mingfei by her counsel (an unofficial translation of which is attached as Appendix A.1 to the Information Circular, with the original statement attached as Appendix A.2 to the Information Circular), pursuant to the relevant provisions of the inheritance law of the People's Republic of China, the common shares of CF Energy held by Mr. Huajun Lin is the joint property of Mr. Huajun Lin and Ms. He Mengfei. After the death of Mr. Huajun Lin, Mrs. He Mingfei being his spouse will receive 50% of the equity of CF Energy held by Mr. Huajun Lin, and the other 50% will be the inheritance of Mr. Huajun Lin that is to be distributed among its heirs equally. 

Ms. He Mingfei and Mr. Zhipei Lin have extreme confidence that the five highly qualified Nominees will act in a manner consistent with governance best practices and maximizes value for all Shareholders. Ms. He Mingfei urges you to support the Nominees proposed by the Concerned Shareholders for election to the Board of Directors of CF Energy.

The current Board and management shows strong Indications of Entrenchment

Mrs. He Mingfei, through her attorney, had delivered an Inquiry Letter to the board of CF energy on July 29, 2020 (an unofficial translation of which is attached as Appendix B.1 to the Information Circular, with the original letter attached as Appendix B.2 to the Information Circular). The letter contained material matters concerning all Shareholders in regards to the estate matter for the board to disclose. The board has not yet responded or disclosed anything regarding this matter until this day. 

On September 29, 2020, the Concerned Shareholder submitted a notice of intention to nominate new directors for election to the Board of CF Energy. Despite this material development in the weeks leading up to the Company's Annual General Meeting, CF Energy chose not to publicly announce that a new slate of highly qualified directors was being nominated. Indeed, even the Company's management information circular, which was not filed until October 8, 2020, makes no mention of the Nominees and does not even acknowledge that the Concerned Shareholder has launched a campaign for change at CF Energy ahead of the Company's upcoming Annual General Meeting.

This intentional silence with respect to matters that are clearly relevant to all Shareholders reflects the Board's lack of concern about keeping its Shareholders informed and is a strong indication of board entrenchment that calls into question both the transparency of the Board and its ability and motive to act in the best interests of all Shareholders of CF Energy.

It is time for change at CF Energy

The current Board of the Company is characterised by insufficient process, insufficient transparency, and insufficient performance, all of which has led the Company through 19 months of value destruction. It appears that Ms. Lin has little interest in keeping other Shareholders of the Company apprised of material developments that may significantly impact their investment, presumably because she anticipates becoming the controlling Shareholder of the Company at some point in the future. We urge you to send an unequivocal message that CF Energy must be run for the benefit of ALL Shareholders by voting your BLUE form of proxy or voter information form today.

The Concerned Shareholder is seeking to elect five highly qualified and independent nominees to the Board of CF Energy that are capable of driving long-term value creation and are motivated to build the Company for the benefit of all Shareholders. Please join in voting the BLUE form of proxy or voter information form "FOR" the Concerned Shareholder's nominees. If you have any questions, please contact Carson Proxy Advisors at 1-888-511-1228 toll-free in North America, or 416-804-0825 (collect) outside North America, or by email at [email protected].

ADVISORS

Carson Proxy Advisors is acting as strategic shareholder, communications and proxy advisor and Norton Rose Fulbright LLP is acting as legal advisors to the Concerned Shareholder.

ADDITIONAL INFORMATION

Disclaimers

Except for the historical information contained herein, the matters addressed in these materials are forward looking statements that involve certain risks and uncertainties. You should be aware that actual results could differ materially from those contained in the forward-looking statements. 11882716 Canada Inc. does not assume any obligation to update the forward-looking information.

SOURCE 11882716 Canada Inc.