LONDON (Alliance News) - Gulfsands Petroleum PLC's biggest shareholder Waterford Finance and Investment Ltd Tuesday succeeded in its bid to remove Commercial Director Ken Judge from the company's board after a vote by shareholders, but its bid to also remove Chief Executive Mahid Sajjad was defeated.
Rival shareholder Abdul Rahman Kayed, who holds a 9.75% stake in Gulfsands Petroleum, had called for the removal of Chairman Andrew West and Independent Non-Executive Directors John Bell and James Ede-Golightly, but these resolutions were also defeated at the meeting, the company said in a statement.
The results of the vote cast doubt on a crucial USD10 million loan that was made to the company by Dubai-based Arawak Energy International Ltd. Arawak late last month terminated the loan agreement, and said it would recall the loan immediately if Sajjad and Judge were voted out, according to Gulfsands. The company said it would be obliged to repay the full USD10 million, along with USD1 million in additional fees and expenses if the loan is recalled.
The USD10 million Arawak loan has been a key component of the war of words between Gulfsands and Waterford, which has a 28.08% stake in Gulfsands.
Waterford had previously said Gulfsand's executive management was "responsible for reckelessley wasting company's and therefore shareholders' resources, in effect practically forcing the company to its knees."
The investor claimed Sajjad and Judge 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 the convertible loan with Arawak.
It had 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".
Kayed had called for the removal of West, Bell and Ede-Golightly but had not said why he wanted the trio to be removed. Waterford had 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 was 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. It had been unable to provide a judgement to its shareholders on the battle for the board because of the split.
Gulfsands Petroleum shares closed flat at 29.50 pence Tuesday.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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