Vancouver-based Eco Oro Minerals Corp. must obtain shareholder approval for the issuance of 10.6 million new shares to four of its shareholders, the Ontario Securities Commission (OSC) ruled on Monday.

The OSC decision says Eco Oro must hold a shareholder meeting by Sept. 30 to approve the issuance of new shares to a trio of fund managers — Trexs Investments, LLC, Amber Capital LP and Paulson & Co. Inc. — and Anna Stylianies, the firm’s executive chairwoman.

Eco Oro issued the shares last month without a shareholder vote; the issue was approved by the Toronto Stock Exchange.

The TSX’s decision and the share issue were challenged by two Eco Oro shareholders engaged in a proxy battle, Courtenay Wolfe and Harrington Global Opportunities Fund Ltd., who are seeking to replace the company’s existing board of directors. Eco Oro’s annual meeting is scheduled for April 25.

In their application to the OSC, the dissidents argued that the shares were issued “to guarantee that the board is successful at the meeting; and the new shares are solely for the benefit of those insiders of the company who will support the board’s attempt to entrench themselves.”

In its decision, the OSC ordered that the decision by the TSX should be overturned, and that Eco Oro must seek shareholder approval to ratify the issuance of the new shares. If that approval is not granted, the company’s board should reverse the issuance of the shares, the OSC decision says. In the meantime, the disputed shares are cease traded, and cannot be voted at the firm’s upcoming annual meeting.

The OSC didn’t give detailed reasons for its decision, saying only that its opinion is that the TSX decision “should be set aside and that it is in the public interest to make an order … to require shareholder approval for the issuance of the new shares.