Trinad, a shareholder group which already has a 12.4 per cent stake in Majesco, has offered to purchase 2 million shares from the troubled publisher on condition that a "more independent" board is appointed.
In a letter filed with the SEC, Trinad claimed that CEO Morris Sutton is conspiring with his sons Jessie and Joseph - who are company officers - to improve the family's personal finances at the expense of the company.
Trinad observed that Jessie Sutton's salary was USD 550,000 last year, while Joseph earned USD 246,000 plus USD 160,000 in share options - impressive figures considering the series of financial woes faced by Majesco.
According to Trinad, "Jessie and Joey Sutton do little to further [Majesco's] business and strategic objectives, and have been placed in such high-paying positions of management as a result of Morris Sutton's selfish desire to compensate his own children at the expense of [Majesco] and its shareholders." The group is demanding that the pair resign or are removed from the company.
Trinad also claims that Majesco paid USD 2.3 million to a packaging company co-owned by Morris Sutton's brother last year. In addition, the group alleges that Jessie Sutton's father-in-law violated SEC legislation by selling more than USD 340,000 of stock on January 25th, 2005 - a day before the company's offering of 6 million shares of common stock.
Trinad said it intends to file suit against Majesco, plus several current and former executives, alleging a breach of fiduciary duties, asset mismanagement, self-dealing transactions, the usurping of corporate opportunities and poor use of judgement in appointing officers.
The shareholders' group offered to buy 2 million shares at USD 1.50 each; as part of the deal, Trinad insists that it must be allowed to nominate three people for election to Majesco's board at the next annual meeting. The offer expires today.
This is not the first time Trinad has attempted to purchase more shares in Majesco - in September, the group offered USD 5 million for 3.3 million shares in stocks, but the deal was rejected. In a letter to the board, Trinad's Robert Ellis wrote: "We believe that the company now faces danger to its continued existence and prosperity... The time has clearly come for the board to take decisive and aggressive action to begin to deal with the enormity of problems that now face the company."