Altair Nanotechnologies (ALTI) Airs their Dirty Laundry

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In a recent article titled “Is Altair Nanotechnologies (ALTI) In Trouble?“, we pointed out that while Altair’s (NASDAQ:ALTI) business may seem appealing, some recent events highlight possible turmoil inside the company. We highlighted that the current Board of Directors now shows that control is mainly in the hands of Canon Investment Holdings executives. We also questioned the fact that ALTI had acquired such a large amount of land for their commercial production facility and that they were facing issues with their debt. Just a few days ago, a resignation letter from Eqbal Al Yousuf, a member of the Audit Committee of the Board, raises even more concerns about the company’s future. 

Who is Eqbal Al Yousuf?

On October 6, 2008, ALTI announced a $10 Million Private Placement with Al Yousuf, LLC, a United Arab Emirates company.   Al Yousuf LLC was founded in Dubai in 1953 and has steadily grown to become one of the leading commercial groups in the United Arab Emirates with more than 3,000 employees. As part of the private placement terms, Yousuf LLC received two seats on the company’s Board of Directors, one of which was appointed to Iqbal Al Yousuf, the President of Al Yousuf LLC. This is the individual who tendered his resignation on March 20, 2014, with some fairly scathing comments.

The Resignation Letter

Mr. Yousuf starts by criticizing the Board’s ability to function:

In recent months, our board has ceased to function effectively and I have lost confidence in our Chairman’s ability to oversee this board in the best interests of the company and its stakeholders (including our employees, shareholders, customers and certainly more so than ever, our creditors).

He then goes on to question the decision made to take out loans for the land acquisitions Ali made without consultation of the entire Board:

Important decisions affecting the Altair US group as a whole are taken at the level of our Chinese affiliates, without consultation of this board. A recent example of this are the loans granted by the Bank of China and the Wu’an Rural Credit Cooperative Co, Limited in October, last year for amounts of approximately $3.8 million and $17 million, respectively. These are material developments but I only learned about them when stumbling upon the press release filed by the company.

He questions the image that ALTI is projecting to their US customers, and mentions specific concerns from their largest US customer (most likely Hawaiian Electric Light Company):

Our US customers are reluctant to order from us. They need to be reassured about the continuity of our supply chain. I understand that one of the Company’s largest customers in the US recently voiced his concerns about our ability to deliver on a large order.

He then finishes with a statement meant to give hope to shareholders:

I have decided to resign because I thought it was the right thing to do as a fiduciary for the Company and its stakeholders. Sometimes a board member being disruptive is exactly what a Company and board needs at a critical time. The situation can be fixed, but time is of the essence.

Mr. Yousuf’s letter can be read here in its entirety as it contains many additional pieces of information about ALTI from Mr. Yousuf’s perspective. The fact this letter has been published is very concerning since the Board should have been able to work out any problems with Mr. Yousuf to prevent shareholders from seeing such dirty laundry. Altair Nanotechnologies’ (NASDAQ:ALTI) shareholders should pay very close attention to this company’s moves going forward.

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