LONDON (Alliance News) - Gulfsands Petroleum PLC's largest single shareholder, Waterford Finance and Investment Ltd, Tuesday urged fellow investors to vote in favour of removing two of the company's directors, following a similar appeal in June to remove the company's chairman.
Waterford, which has a 26.51% stake in Gulfsands Petroleum, has made the appeal to shareholders to remove Mahdi Sajjad and Kenneth Judge as directors of Gulfsands following its increasing disappointment in the performance of the company in recent years.
In a statement after the market close Tuesday, Gulfsands said: "The board notes the statement... to the effect that Waterford has served notice of requisition of a general meeting of the company in order to remove the Chief Executive and Commercial Director from the board, and will comment further in due course."
In June, Waterford made a similar appeal to shareholders to vote against the re-election of Chairman Andrew West.
West had said he would resign in July 2013, but then stood for re-election a year later. Waterford said at that time that "only someone with a very high opinion of himself would [publicly] state his intention to resign and then offer himself for re-election."
Waterford Tuesday said it is concerned that the company has "lost direction" under the current management and failed to build a viable business outside of Syria. It claims Gulfsands has "recklessly spent valuable cash reserves on assets that have yielded no commercial result and that have not created any value."
That follows claims by Waterford in June that Gulfsands had "spent over USD100.0 million during the course of three years with no visible commercial success," which it reiterated again in its latest statement, but revised the period to two years.
"It is far from clear to us whether Gulfsands will have sufficient funds to bring its Syrian assets back on stream if and when the sanctions are lifted," said Waterford in a statement.
Waterford has further complained that the management of Gulfsands have taken unfair bonuses during the 2012 and 2013 financial years.
"During this prolonged period of under-performance and destruction of shareholder value, the Directors of Gulfsands have chosen to reward themselves with what we calculate to be over USD5.3 million in total remuneration, including bonuses," said Waterford.
"This level of remuneration is higher than peer companies and is completely unjustifiable given the financial performance of the company and the failure of the board to deliver shareholder value," it added.
Waterford said Chief Executive Mahdi Sajjad and Commercial Director Kenneth Judge should take prime responsibility for recent failings, claiming that they have both lost its confidence as well as the confidence of other investors in the company.
Waterford said its interests are "fully aligned with interests of all investors in the company."
"We strongly believe that this change in the company's management is essential to stop any further destruction of shareholder value and to put in place a viable strategy for the company going forward," said Waterford in a statement.
In June, Gulfsands responded to Waterford's appeal to fellow investors by stating that other shareholders did not share the views of Waterford.
For the year ended June 30, Gulfsands reported a pretax loss of GBP9.2 million and a USD8.4 million cash balance at the end of the period.
Gulfsands shares closed 1.6% lower Tuesday at 39.12 pence.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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