LONDON (Alliance News) - Gulfsands Petroleum PLC Tuesday said it has cancelled its planned shareholder meeting that was set to allow investors to try and resolve ongoing disputes that have split the board and management and its biggest shareholders, after it received legal advice regarding the voting rights of one of its major investors.
The extraordinary general meeting, which was due to be held on Tuesday, was set to try and resolve an ongoing dispute between the company and its biggest shareholder, Waterford Finance and Investment Ltd, which holds a 28.08% stake in Gulfsands, as well as separate shareholder Adbul Rahman Kayed, who holds a 9.75% stake.
Gulfsands adopted the view that a third shareholder, Al-Mashrek Global Invest Ltd, which holds a 5.74% stake in the company, would not be allowed to vote in the meeting "in light of Syrian sanctions", but said it has now been given legal advice that the shareholder should be permitted to vote.
After receiving the advice, Gulfsands said it "is arguable that the Notice of Meeting may be invalid by virtue of shareholders not having been properly informed of the voting status of Al-Mashrek shares at the time of posting the notice," causing the company to cancel the meeting, it said in a statement.
Waterford has called for the removal of Chief Executive Mahid Sajjad and Commercial Director Ken Judge several times since last November, claiming the pair were primarily responsible for the company's underperformance.
Waterford has said Sajjad and Judge have spent cash reserves on assets that "have yielded no significant commercial results," and said they are paid more than they would get at peer companies. It has also said they have put the company's assets at risk on "uncommercial terms" after arranging a convertible loan with Arawak Energy (UK) Ltd.
Waterford said it thinks that if Sajjad and Judge remain in place, then Gulfsands' Moroccan and Columbian assets could be disposed of for nominal sums, its Syria assets could be disposed of to Arawak at a distressed price, while the two directors "could continue to receive excessive and unjustified remuneration in the context of the company's underperformance".
In a separate dispute, Kayed has called for the removal of Chairman Andrew West and Independent Non-Executive Directors John Bell and James Ede-Golightly. Kayed has not said why he wants the trio to be removed, but Waterford has defended all three positions as it believes the company has a sufficient number of independent non-executive directors in place to ensure good corporate governance, and therefore didn't support Kayed's resolution to remove West, Bell and Ede Golightly.
The board of Gulfsands is also split, with Non-Executive Director Joe Darby supporting West, Bell and Ede-Golightly, whilst Finance and Administration Director Alan Cutler and Technical and Operations Executive Director Ian Conway support Sajjad and Judge.
The EGM was set to allow shareholders to decide whether to remove any of the directors being proposed by Waterford and Kayed before it was cancelled.
"Directors are aware that this action puts the company in default of its obligations... The only course of action open to the directors to mitigate this default is to call a new meeting just as soon as is practicable," said the company.
Gulfsands shares were untraded on Tuesday morning. The stock last traded at 27.50 pence per share.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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