The Toronto Estonian House 2019 Annual General Meeting was held in the Grand Hall of the Estonian House (EH) on June 20th. The meeting is usually held earlier in April, but this year it was delayed due to the incorporation of two new Estonian House subsidiaries (International Estonian Centre Inc. and Fund for International Estonian Centre). This necessitated more complex and time consuming financial reporting, which delayed the meeting.
The Chairman of the Estonian House board,
Veiko Parming, opened the meeting. After approval of last years’ minutes, the appointment of scrutineers and other typical AGM agenda items, Mr. Parming gave an overview of the new legal structure and entities involved in the planned International Estonian Centre (IEC). This somewhat complex structure has been previously explained in several past Community Information Meetings. The main goal of this complex structure is to minimize capital gains taxes that could be triggered by the sale of the EH and to accept charitable donations for the IEC project. The new structure is represented below.
IEC project manager
David Kalm gave an overview of the current status of IEC plans and reviewed all the different subcommittees involved in the project. According to David Kalm, everything is proceeding well. The sale of the current Estonian House to Revera is expected to close in March 2020, along with the Estonian Foundation in Canada (EFC) owned properties on Broadview Ave and Chester Hill Road. The review of the rezoning application by Revera is currently underway by the City. On Madison Ave, the project is in the planning and design stage, with the critical TTC technical review expected to be finished by the end of the year. The closing of 11 Madison and the beginning of the construction is expected to follow shortly thereafter. Fundraising for the IEC is also going very well and substantial pledges have been secured.
Veiko Parming reviewed the maintenance challenges with the current EH, mainly work that has been done and expenses incurred related to water damage and roof repairs. EH has delayed major maintenance work for years and all these delays are finally catching up with reality. While most of the different roofs that make up EH have now been replaced, it has come at large cost, albeit costs that were partially offset by a City grant, Friends of Estonian House fundraising and substantial one time donation from the community.
The 2018 Financial statements were presented by the treasurer
Linda Kazakoff. In 2018, the operating loss was $124K. Compared to the last year’s operating loss of $43K, the increase in loss was mainly driven by $65K spent on the capital campaign, increase in salaries and benefits, and marketing expenses. The budget for the 2019 forecasts nearly a balanced budget.
In answer to shareholders’ questions (Markus Alliksaar and Väino Einola), Mr. Parming assured that all the monies provided by the 3Orgs to IEC are interest free loans without a set repayment schedule, contrary to the financial reports provided by the EFC during their AGM. The loans are expected to be paid back at a time when IEC is able to do so or in the event it is sold.
The EM board put forward a motion to change the by-laws that govern the way a replacement director is chosen if a current director resigns or is unable to continue. All bylaw amendments are required by law to be ratified by a 2/3 vote. The current system calls for a new director to be appointed from the list of unsuccessful candidates who achieved the highest vote count at the last AGM board election. The EM board wants the flexibility to bypass this list and appoint anybody they have deemed qualified. This appointed director would serve until the next AGM when the shareholders will elect the director to serve out the remainder of the term. Väino Einola made a motion to change the EM motion, essentially leaving the old system in place. Mr. Einola’s motion was defeated by 65.1% vs 34.9%. The EH board motion was then voted on and approved by more than the required margin of 2/3rds, thanks to an extra 553 votes that participated in this vote than voted on Mr. Einola’s motion. The number of votes cast for this motion exceeded the number of shareholders present at this meeting as stated by Mr. Parming at the beginning of the meeting by 315 votes. Markus Alliksaar asked for the voting records to be preserved for possible future recount and there were several clarifications asked by other shareholders to explain the unusual increase in the number of votes. Mr. Parming stood by the accuracy of the count and explained that several proxy holders might have abstained from the first vote and/or additional proxy holders may have entered the meeting after its start or between the votes.
Since both current board members Linda and Nick Kazakoff decided not to stand for re-election, EH board proposed Rob Kübar and Blake Royer as new directors. Eric Sehr, the current board secretary, was also slated for re-election. In addition to the above candidates nominated by the board, Väino Keelmann and Ingrid Tanner were nominated from the floor.
Rob Kübar,
Blake Royer and
Eric Sehr were elected as new directors by a large margin, approx. 70% vs 30%.
Enno Agur,
Liis Jakobson and
Lena Kõiv were elected as members of the Internal Audit Committee, with a similar comfortable margin over floor-nominated Väino Keelmann.
Two other requests presented to the board a week before the meeting were addressed by Mr. Parming.
Allan Meiusi’s request asked to declare that the EH board has not met the terms and condition of the motion passed at a Special General Meeting of the Shareholders on April 25th, 2017 (the motion to proceed with the “Madison Project”) and that the Board must seek a new mandate to continue to pursue the project.
Markus Alliksaar’s motion would have commissioned a parking study that would have cataloged potential routes to the IEC and their potential traffic issues, as well as inventoried all available parking within the short parking distance. It would have canvassed all current Estonian House user groups for their parking needs.
Both requests were ruled out of order, since they lacked at least 5% of shareholders support and were presented to the board without sufficient time before the AGM. In addition, the board disputed the substance of the requests.
Väino Einola asked for clarification regarding the governance structure of the IEC. Mr. Einola asked for a copy of the board resolution and minutes that authorized the creation of the 2 subsidiaries and the trust agreement that has been executed between the subsidiaries. Mr. Parming did not see it possible to release this type of legal document to the individual shareholder.
Mr. Einola also questioned the need to incorporate two new subsidiaries of the Estonian House, based on the opinion he had obtained from Revenue Canada. Mr. Parming re-iterated the board’s position that the board will continue to follow the advice they have received from their lawyers and that the current set-up is the best possible way to handle the sale of the EH, reduce the risk and to avoid paying capital gains tax.
Photos: Tauno Mölder
