NetSol International Inc. (NTWK)

[Tingleff]

The article:
DUELING PRESS RELEASES

The New York Mets had this problem last year. With two pitchers named Bobby Jones it was natural for fans to become confused. At least they had different middle initials.

As we told you earlier, a group of dissident shareholders is claiming that they now control NetSol International, Inc. Not so fast, according to the people who have been running NetSol until now. They (the old management team) say that the dissidents have jumped the gun. And they have gotten a Nevada Court to issue a temporary restraining order (TRO) preventing the dissidents from taking over. So now we have two groups – each calling themselves NetSol International. (See Update: NetSol International, Inc. – Going Nutso At NetSol).

Each of these dueling factions has been issuing press releases on behalf of NetSol International – with no middle initials to alleviate confusion. Maybe they could start calling themselves new NetSol and old NetSol, or good NetSol and bad NetSol (although investors might be unable to agree on who’s who).

Which NetSol is saying what? As a general proposition we think it is reasonable to conclude that the new NetSol (which may not be any NetSol at all once a Nevada Court rules in proceedings initiated by the old NetSol) is issuing the press releases denouncing the old management and extolling the virtues of the designated dissident directors. Conversely, we can only assume that the old NetSol has been sending out the press releases commending the Nevada Court for issuing a temporary restraining order that places a halt (at least a temporary one) to efforts by the dissidents to assume control of the Company.

So where does that leave today’s press release announcing that NetSol International (a generic reference to the corporate entity called NetSol and controlled by Group A, Group B or nobody at all) has retained Softbank Investments International (Strategic) Ltd., a Hong-Kong based investment banking firm as financial advisor to the Company. Certainly, this did not originate with the old NetSol. Softbank Investments is the employer of Shelly Singhal. Mr. Singhal is one of the Directors designated by the dissident shareholders who claim to control the new NetSol. According to his resume, Mr. Singhal joined Softbank just this month.

Curiously, the press release issued June 14th does not mention that Singhal is one of the purported new directors of NetSol selected by the dissidents, or describe his relationship with Softbank. Do potential conflicts loom? The only reference to Singhal comes at the end of the press release where he is listed as the “contact” for Softbank. We (and we expect you) can only wonder why these other facts have been omitted. It hardly marks an auspicious debut for the putative new management team.

Oh yes, the contact listed for NetSol is Cary Burch, who once was a director of the old NetSol, switched allegiances to the new NetSol, and was rewarded by being named Chairman of the Board by his new dissident associates. So this release must have come from the new NetSol. But that raises another question. Have the dissident shareholders violated the TRO by issuing the press release in the name of NetSol International? Or by entering into an agreement with Softbank?

No doubt the Nevada Court will be considering those questions tomorrow. Can the regulators be far away from this mess? (6/15/2001)
http://www.stockpatrol.com/radar/toc.html#061501
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Kr
Jens