Last checked at 
LONDON (Alliance News) - First Investment Holding Ltd said Monday Argo Blockchain PLC's recent tech venture is a "flagrant abuse of shareholders' trust".
Earlier on Monday, Argo Blockchain unveiled a new strategic partnership with HIVE Blockchain Technologies Ltd. The deal will see Argo receive 16.3 million HIVE shares - 5% of HIVE's share capital - in exchange for 44.1 million Argo shares representing 15% of Argo's share capital. The deal values Argo's shares at 11.6 pence each and will involve no cash exchange.
Shares in Argo Blockchain were up 34% Monday afternoon at 4.70 pence each.
Under the strategic partnership, for which conditional heads of terms have been signed, Argo and Hive intend to create "the world's largest purpose-built business-to-business [bitcoin] mining service provider" which will target "large-scale enterprise and institutional customers".
According to Argo, the partnership is the culmination of three months of discussions and will give cryptocurrency miners access to Argo's 10.5 megawatt and part of HIVE's 45 megawatt capacity.
First Investment - which holds a 14% stake in Argo - said the deal is a "last frantic attempt" by the company to change shareholders' minds ahead of a requisitioned general meeting this week - where First Investment is looking to appoint a new director, Jeff Couch, and remove two existing directors, including Chair Jonathan Bixby.
"Given management has now announced a change to their purported strategy three times since February 2019, First Investments questions how meaningful the 'three months of discussions' regarding the conditional heads of terms were and why they were not mentioned before this latest announcement," said First Investment.
First Investments added: "Further, in the event that the contemplated strategic partnership is ultimately concluded on the terms described, current shareholders will see their ability to determine the company's future strategy greatly diminished particularly as a result of the issuance of 15% of the company's issued share capital to Hive, meaning that management and Hive would control approximately 24.5% of Argo's enlarged share capital."
First Investment is also concerned with the USD1.5 million being spent on additional equipment required for the partnership, which First Investment believes is "rapidly depreciating".
"First Investment believes that to commit capital ahead of such an uncertain, conditional,venture which may never happen is highly inappropriate and deliberately vexatious. This course of action by management is particularly disrespectful to all shareholders, given the company is just days away from the requisitioned general meeting, where shareholders are voting on a proposed change in strategy and board."
First Investment reiterated its "strong recommendation" that shareholder vote in favour of the resolutions at the upcoming meeting.