Investor Everest succeeds in ousting Petropavlovsk CEO
The game of boardroom musical chairs at Russia-focused miner Petropavlovsk continued on Monday as investor Everest Alliance managed to oust the acting chief executive and chairman.
In the latest twist to the long running saga, shareholders also voted for an independent forensic investigation into the company’s affairs.
A motion to reappoint former chief executive Pavel Mavlovskiy failed. Everest, an investment company controlled by Russian businessman Nikolai Lioustiger, had been accused of acting in concert with major shareholder and rival miner UGC to gain control without making a formal takeover offer.
UGC owner Konstantin Strukov denied he wanted to buy the London-listed gold miner, insisting he wanted it to remain a public entity.
Mavlovskiy and six other directors were voted out at previous general meeting in June sparking a power struggle between rival groups of investors keen to take control of the firm. Prosperity Capital Management, a Russian-focused fund manager that with 17% of Petropavlovsk, waned Maslovskiy and four other directors reinstated.
Five new board members were voted in at the June meeting, pending approval on Monday. However, these were all given their marching orders after an Everest motion to dismiss them crossed the line.
These included Peter Hambro, who founded the FTSE 250 gold miner, and Alya Samokhvalova, appointed temporary chief executive when Mavlovskiy was removed.
After Monday’s vote, Petropavlovsk’s board now comprises of James Cameron Jr, Maksim Kharin, Charlotte Philipps and Katia Ray.
The investigation will examine related party transactions during the three years prior August 10.
Prosperity said Everest and UGC had combined to "overwhelm the ballot box".
"In so doing, they drowned out both the voices of minority shareholders and the recommendations of leading independent proxy advisors Institutional Shareholder Services and Glass Lewis," Prosprity said in a statement.
"As the EGM only returned the board comprised of the four directors who were elected as the result of an underhanded action by certain shareholders at Petropavlovsk’s annual general meeting in April, it is absolutely critical that it demonstrates to Petropavlovsk shareholders that it is committed to best-in-class corporate governance as prescribed by the UK Corporate Governance code."
Prosperity said this should include an immediate search for additional independent non-executive directors to "assure shareholders that it is free from the influence of Everest and UGC".
Alexander Branis, chief investment advisor at prosperity, said: “This is a disappointing result, but we remain unbowed."
"We do not intend to stand by as control of our Company is surreptitiously transferred to Everest and UGC, the latter of which claimed that it wanted a board comprised of truly experienced, diverse, and independent directors which we now clearly do not have."