Lufkin Industries, the oilfield pump manufacturer, announced last Wednesday that a probe conducted by a special committee did not reveal any breach by the board of directors in its fiduciary duties. The said acts reviewed were during the the takeover discussions with General Electric, which two shareholders said was highly questionable and irregular.
Last May, General Electric was awarded US antitrust approval to purchase Lufkin for US$2.98 billion allowing GE to increase its presence in the fast expanding market of oil and natural gas extraction from oil shale projects.
According to the Lufkin board, it said it would not proceed to investigate with the allegations made by shareholders after its review of the report of the special committee. The report stated, "The Committee has concluded its investigation and has presented its findings and recommendations to the Board. The Committee's investigation did not reveal any breach of fiduciary duties committed by the Board, and the Committee concluded that none of the allegations in the Letters had merit. The Committee determined that the allegations made in the Letters have little likelihood of success and that, accordingly, the pursuit of any of the allegations in the Letters would not be in the best interest of the Company and its shareholders."
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