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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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[X] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ERLY INDUSTRIES INC.
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(Name of Registrant as Specified In Its Charter)
THE POWELL GROUP
FARMERS RICE MILLING COMPANY, INC.
NANETTE N. KELLEY
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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FOR IMMEDIATE RELEASE
COMPANY CONTACT:
Nanette Kelley
President
(504) 992-4540
[LETTERHEAD OF THE POWELL GROUP]
THE POWELL GROUP REJECTS TWO PROPOSED AMENDMENTS
TO THE ARTICLES OF INCORPORATION TO RESTRICT
SHAREHOLDERS' RIGHTS BY ERLY
INDUSTRIES INC. (NASDAQ)
BATON ROUGE, LOUISIANA, SEPTEMBER 2, 1997...The Powell Group, its
wholly owned subsidiary Farmers Rice Milling Company and The Powell Group
President Nanette N. Kelly, who together own approximately 3.6% of the common
shares of ERLY INDUSTRIES INC. (NASDAQ:ERLY), Los Angeles, announced today that
they reject two proposed amendments to the Articles of Incorporation of ERLY
that would have the effect of restricting shareholders' rights.
Kelley said that in the Proxy Statement for ERLY's annual meeting
scheduled for September 26, 1997, the board of directors proposes amendments to
the ERLY charter to eliminate cumulative voting in the election of directors,
which California law requires except under limited circumstances, and to require
shareholder action only at a shareholders meeting and not by written consent.
Under cumulative voting, each share has a number of votes equal to the number of
directors to be elected. Shareholders may cast all of their votes for a single
candidate or allocate them among as many candidates and in any proportion they
choose, she explained.
"We believe these proposals undermine basic corporate democracy and are not
in the best interest of the shareholders. We believe they are another example
of how the ERLY board desires to exclude individual shareholders from having a
meaningful voice in the activities of the company. We are very concerned that
many shareholders may not fully understand that approval of these amendments
will limit substantially their influence on the board in the future," said
Kelley.
On August 25, 1997, Kelley and The Powell Group Companies filed a Proxy
Statement with the Securities and Exchange Commission seeking to elect a new
board of directors of ERLY. Separately, they recently filed a lawsuit in
Federal Court against Gerald Murphy, chairman and chief executive officer of
ERLY, and Douglas Murphy, chief operating officer and a director of ERLY,
alleging, among other things, breach of fiduciary duty and waste of corporate
assets in connection with litigation arising from the defendants' personal
investment in a real estate development project in Texas.
A privately-held holding company based in Baton Rouge, Louisiana, The
Powell Group has interests in rice farming, rice milling and storage, rice
hull-to-electricity generation, radio broadcasting, commercial and residential
real estate development and construction, travel management services and
timber.
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