Heinz Schimmelbusch did not smile, did not stray from his script, did not throw verbal punches at his detractors. He didn't apologize - didn't give anything, really, other than bland remarks about how it's the economy's fault and everything will be better some day.
The Timminco chairman barely looked up at the small number of investors and the larger collection of empty seats. The most famous of the company's shareholders, Eric Sprott, was not in attendance at Friday's annual meeting. But a representative from the law firm that is suing Mr. Schimmelbusch and the company was. A few reporters and a TV cameraman were there as well. Mr. Schimmelbusch didn't have much to offer them, either.
"You will understand that under the circumstances, no comment is the appropriate comment," he said, before scurrying off.
Well, that's a change. A year ago, he had all manner of comment. He held a press conference to tout the company's technological breakthrough - a new process for manufacturing a key material in solar panels, cheaper than anyone else, supposedly.
He bragged about the rising stock price ($30) that had helped make him and Mr. Sprott richer than Croesus. Mr. Schimmelbusch boasted that he'd been forced to move the meeting to the historic Imperial Room at the Royal York Hotel in Toronto, where Tony Bennett once sang, to accommodate the large throng of happy shareholders. And to those who claimed the whole thing smelled suspiciously like a crazy Canadian stock speculation, he warned: "If somebody oversteps a certain line, if he's over the line, it's straight going to the courts."
The venue for this year's event was the same (what, were no rooms available in the old Vancouver Stock Exchange tower?) but the mood was completely different. Timminco's solar project is so far a bust: Its costs are way beyond its projections, the market for its product has crashed, and the story looks like it's coming unglued. Analysts are openly dumping on the company. Customers are looking to wriggle out of contracts. With the shares at $1.30, some $2.9-billion in shareholder value has been eviscerated in the past year, enough to fill Brian Mulroney's safe 12,800 times over.
Just in case that wasn't enough to spoil the party, a Toronto law firm filed suit on behalf of shareholders, alleging the company made false and misleading claims last year when it told the world it had found a low-cost way of making the silicon that converts solar energy to electricity. It may be "straight going to the courts" again, but with Mr. Schimmelbusch as defendant this time.
So, what does the man think? Did Timminco overpromise? No comment.
What about Timminco's lawsuit against hedge fund managers who took him on last year? No comment.
All right, enough of the legal matters. Tell us, does the company's manufacturing process work on a commercial scale?
Mr. Schimmelbusch walked away without saying another word.
But these stories often end this way - with the principal figure slipping out of the room as quickly as possible and the lawyers left to sort out the truth and clean up the mess. If Timminco's solar miracle turns out to have been a mirage - and I'm not saying it is, although each new dismal financial report seems to point in that direction - what then?
Don't count on the securities regulators getting on it. They've had more than a year to probe suspicious trading in the stock, including the purchase of 152,000 shares by the former CEO weeks before the company announced its incredible "breakthrough" and Timminco went on its astonishing run from penny stock to $3-billion darling of the solar energy business. So far, they've produced nothing.
Questions of insider trading are relatively simple. The odds of the Ontario Securities Commission sorting out the more complex issues of truth and fiction at Timminco are the same as the Phoenix Coyotes turning a massive profit. Because in the end, it's a fine line between misrepresentation and simply being too optimistic, and doesn't Mr. Schimmelbusch seem clever enough to have stayed on the right side of it?
The same challenges face the shareholder lawsuit. Yes, Timminco commissioned a consultant to write a highly positive study that projected up to $1-billion in operating profit by 2010. Several months later, the company withdrew the absurd report, claiming the numbers were no longer valid. But was that manipulation? How can you prove it?
So here's a prediction on how this will play out: Timminco will fade, Bay Street will lose interest, the regulators will do zilch, the shareholder lawsuit will be settled out of court. Mr. Schimmelbusch will move on to other ventures, presumably with money from people unaware of this little train wreck.
But if he does, investors shouldn't forget what happened Friday. When Heinz Schimmelbusch didn't like the questions, he walked away.