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T Squared is a fundamentally-oriented private investment firm focusing on special situation and deep value companies.
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  • Mr. Datawni's Resignation From L & L Energy, Inc. Paves Way For Stronger Board 5 comments
    Nov 27, 2013 9:57 AM | about stocks: LLEN

    T Squared Partners, a long-term investor in L & L Energy, Inc., welcomes the recent resignation by Mr. Datawni from its Board of Directors. While we are very impressed by the existing caliber of coal industry expertise currently comprising the Board of Directors of the Company, we believe that the company did not possess a strong member of the board with knowledge and expertise in the entrepreneurial, small capitalization financial markets. Based on our observations over the course of his tenure, Mr. Datwani lacked the necessary business or financial acumen that would be required to advise L & L Energy on financial and public markets matters. Therefore, we believe his role in the company hindered the financial capabilities of L & L Energy.

    Mr. Datawani's resignation, despite being untimely, is a positive event to pave the way for a stronger, more appropriate board member with the needed financial experience. With the strength and exposure that the Board of Directors already possesses in the coal industry, we feel the company should now focus on identifying a board member that can better help guide them through the future successes and challenges that will arise by virtue of being a rapidly growing company.

    While being a public company can provide much long-term value to shareholder, the small cap marketplace nevertheless also contains many parties of negative ilk, from the stock price manipulators to the death spiral financiers, which provide a reputable company challenges to creating such shareholder value. Having this spot open on the board, we believe, should be an opportunity for L & L Energy to bring on a member of the board that can help guide them and lead them through the potential perils that are present in the marketplace. As a long term shareholder, with both coal and financial experience, we would welcome the opportunity to further align our interests and provide more guidance to the company as it navigates through its near and long term opportunities while helping to ensure that the company avoids pitfalls of the past.

    Disclosure: I am long LLEN.

    Stocks: LLEN
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Comments (6)
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  • Alfred Little
    , contributor
    Comments (479) | Send Message
     
    Are you saying that T2 would actually like to become a director of LLEN?
    27 Nov 2013, 08:47 PM Reply Like
  • jamesm2919
    , contributor
    Comments (11) | Send Message
     
    Good article by a long-time faithful investor in LLEN. It is truly a deep value company.
    27 Nov 2013, 09:22 PM Reply Like
  • CoolWatch
    , contributor
    Comments (146) | Send Message
     
    While you are very impressed by the existing caliber of coal industry expertise currently comprising the Board of Directors of the Company, are you equally impressed by having Mr. Dickson Lee holding two top positions, Chairman & CEO, of the Company concurrently? Do you see the risks after the Ironridge issue contributed by him?
    27 Nov 2013, 10:57 PM Reply Like
  • TSquared
    , contributor
    Comments (22) | Send Message
     
    Author’s reply » Cool -
    I believe the company would benefit from surrounding itself with more talent. I believe the ironridge deal was a horrendous structure and was due to lack of sophistication of financial markets of the company. These death spiral fanciers sell this garbage a good vehicle and the company didn't see through the sales pitch. Mohan was supposed to be there solution to financings and clearly was a really weak link. We believe this is an area they need to build up significantly.

     

    Regarding Dickson holding both chairman and CEO if we saw a great candidate for CEO we would push very hard for Dickson to consider taking the Chairman role. In actuality if the right individual was found I believe Dickson would welcome the addition to free him up to focus on strategy and expansion.

     

    We agree that such a move would add focus and could be a great move for the company, but let us stress the fact that its not something to rush into and it must be the right candidate that possesses the work ethic and drive needed to grow a business which is no easy task.
    28 Nov 2013, 09:40 AM Reply Like
  • CoolWatch
    , contributor
    Comments (146) | Send Message
     
    T2

     

    I would not blame the Company for lacking of sophistication as the whole deal seems to me was simply out of the general management control. If I read it correctly, non of the management members except for Dickson Lee himself knew what was being arranged until the Ironridge deal transacted and later requested the audit committee for approval upon query.

     

    I mean the audit committee could have rejected such transaction unless the concerned loan was not assignable without LLEN's prior written consent. Well, may be one can argue that the Company already knew the deal b/c Dickson is the CEO & Chairman. But, let's not forget he also was the ONE who assigned the loan without advising the Company. This, is exactly where the problem is and what the Company is having difficulty in corporate governance and transparency.

     

    How could a top executive, being a well versed CPA & experienced finance manager, not understand the legal & financial implications of a deal like the Ironridge deal and the related potential risks his company would be facing unless he failed his Finance101 in college, or lacked the strategic mind & sound judgement, or personally was in a very dreadful financial position, or even had hidden agenda contrary to shareholders' interest.

     

    While agreeing that the Company needs more talented people, I ought to stress that the priority must be set clear by the BOD to reach out for a CEO without delay. Dickson's track record with the SEC was not impressive. Though that was history and not settled long ago, such record remains and has been and will always be a subject to be used by shorts. I do not see any change in this direction so long as Dickson remains as CEO, a top executive with overwhelming power. With the foregoing, the Company can hardly raise funds nor grow business healthily no matter how hard the management tries or brings in different exciting initiatives. The market sees it differently.

     

    In my opinion & with due respect to Dickson, he had been the key to success but he has now become a risk factor of the Company.
    29 Nov 2013, 01:13 AM Reply Like
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