LONDON (Alliance News) - Waterford Finance and Investment Ltd, the largest shareholder in Gulfsands Petroleum PLC, Tuesday described the company's decision to cancel a general meeting to resolve ongoing disputes between two shareholders and the company as "a breach of the company's legal obligations," saying that shareholders have already made up their minds.
The extraordinary general meeting, which was due to be held on January 13, was set to vote on resolutions to oust management and board members in an ongoing dispute between the company and Waterford Finance, which holds a 28.08% stake in Gulfsands, as well as separate shareholder Adbul Rahman Kayed, who holds a 9.75% stake.
The meeting was cancelled by Gulfsands on the morning of the meeting after it received legal advice regarding the voting rights of a third shareholder and one of its major investors, Al-Mashrek Global Invest Ltd, which holds a 5.74% stake in Gulfsands.
Gulfsands adopted the view that Al-Mashrek would not be allowed to vote in the meeting "in light of Syrian sanctions", but said it was given legal advice that the shareholder should be permitted to vote, prompting the meeting to be cancelled and re-organised.
Gulfsands said it was "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."
On Monday, Gulfsands Petroleum re-scheduled its general meeting for February 3.
Waterford Finance Tuesday said that the cancellation was a breach of the company's legal obligations, and said the meeting should have gone ahead as planned and stated shareholders would have voted in favour of Waterford's resolutions.
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 Tuesday said that "from discussions with other shareholders following the company's cancellation of the meeting, that a majority of shareholders have voted in favour of the resolutions to remove Mr Sajjad and Mr Judge and so effectively shareholders have already decided that they should be removed."
"In our view, management attempts to delay shareholders' vote at the meeting suggests that they may well have something to hide," added Waterford.
In a separate dispute that was also set to be resolved in the meeting, 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.
Waterford said shareholders should submit their proxy votes to Gulfsand's registrar by 3pm on January 30, reiterating its call to remove Sajjad and Judge.
Gulfsands shares were down 4% to 30.25 pence per share on Tuesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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