Genesis Mining Tries to Take Control of Hive’s Blockchain Governing Board Over $50 Million Dispute
Hive Blockchain Sees Genesis Mining Attempt to Take Over Governing Board After Being Asked To Return $50 Million For Breaching The Established MSA
According to an all-new press-release issued by the folks over at HIVE Blockchain Technologies Ltd earlier today, the firm has notified its clients that its largest shareholder ‘Genesis Mining’ (owner of 26.3% of HIVE’s outstanding shares), has “requisitioned” a shareholder meeting so as to remove any board members that are working “independently” of Genesis. Instead, the company has tried to bring on board a group of directors that are either closely associated with Genesis or have previously worked for the firm (in some capacity or the other).
Some Key Details Worth Pointing Out
- A few days back (on the 20th of April), HIVE’s executive brass came together to appoint an “Independent Special Committee “ for dealing with any requisition and contract related disputes that may arise between the two entities in the future.
- Genesis Mining’s latest requisition comes as a direct response to a formal notice issued by HIVE (earlier this month) so as to notify Genesis about its various material breaches of their Master Service Agreement (“MSA”).
- Genesis’ core committee recently tried to unsuccessfully remove Frank Holmes as the joint interim Chairman and Chief Executive Officer of the HIVE/Genesis venture.
- According to a representative for HIVE, the various breaches committed by Genesis work out to a total of USD $50 million. Additionally, as per the aforementioned MSA, any material breaches committed by Genesis will allow HIVE to terminate the MSA and thereby take additional action as per their wishes.
On the subject, Frank Holmes was quoted as saying:
“Discussions with Genesis for full disclosure of all costs for all mining operations have been ongoing since September 2018. We are frustrated that Genesis unilaterally gave notice of increased costs in Sweden and services under the MSA have not been ‘performed in a professional and workmanlike manner in accordance with the highest industry standards’ as required by the MSA. It is disappointing that Genesis has reacted by attempting to eliminate the dispute by taking control of the HIVE board but I am confident that HIVE shareholders will understand that the meeting requisition is a blatant attempt to take control of HIVE for Genesis’ sole benefit to the detriment of all other shareholders”.
A Closer Look At The Alleged Contract Dispute
As per the above-mentioned press release, HIVE has asked Genesis representatives on “multiple occasions” to provide the former with a clarification on associated power pricing structures being used within countries like Iceland and Sweden. However, despite repeated requests, the firm has “failed to provide full information as to whether HIVE is being charged Genesis’ cost for power in Iceland and Sweden.”
Additionally, in regards to the matter, the folks over at HIVE are now looking to seek out alternative service providers as well as push Genesis to provide more transparency to HIVE and its shareholders — mainly in relation to HIVE’s equipment and operations in Sweden.
In closing out this piece, it should be remembered that HIVE is essentially a TSX.V-listed company that aims to “bridge the gap” that currently exists between today’s blockchain sector and the traditional capital market.
It now remains to be seen what the outcome of this entire ordeal turns out to be. In what is sure to be a rough and tough resolution, we will be sure to update more on the bitcoin mining company situation as soon as more information is made available.
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