(Alliance News) - Prosperity Capital Management has criticised other shareholders for their actions at Petropavlovsk PLC's extraordinary general meeting, in which the chair and chief executive were ousted.
Shares in Petropavlovsk were down 0.8% at 33.15 pence in London on Tuesday morning.
In a statement on Monday, Prosperity, which controls 17% stake in FTSE 250-listed Russia-focused gold miner Petropavlovsk, expressed disappointment that the Everest Alliance - JSC Uzhuralzoloto group of companies' recently enlarged size allowed it and its affiliates to "overwhelm the ballot box".
According to Prosperity, Everest "drowned out both the voices of minority shareholders and the recommendations of leading independent proxy advisors Institutional Shareholder Services and Glass Lewis."
Prosperity said what remains of the board after the vote should start looking for more independent non-executives straight away and "in a transparent manner" to be sure it is not being influenced by Everest and UCG.
Alexander Branis, chief investment advisor at Prosperity, said: "This is a disappointing result, but we remain unbowed. We had many positive discussions with our fellow minority shareholders in the run-up to the EGM all of whom affirmed our position that Petropavlovsk deserves a strong, independent board that will help ensure that the company's intrinsic value is not masked by poor governance.
"We do not intend to stand by as control of our company is surreptitiously transferred to Everest and UGC, the latter of which claimed that it wanted a board comprised of truly experienced, diverse, and independent directors which we now clearly do not have. We will continue to engage with Petropavlovsk shareholders, management, and the board to ensure that governance enables rather than impedes sustained value creation."
Petropavlovsk on Monday said resolutions ousting its chair and chief executive passed at a requisitioned general meeting, along with a resolution requiring it to arrange for an independent forensic investigation.
The successful resolution to remove all directors appointed since July 9 was proposed by Everest Alliance Ltd. The forensic investigation, which will cover related party transactions for the three years prior to the requisitioned meeting, was also proposed by Everest Alliance.
Everest's resolutions to appoint Paul Bushell and Ivan Kulakov to the Petropavlovsk board, failed, but all of its other resolutions succeeded. These included resolutions to remove Non-Executive Chair Peter Hambro, Chief Executive Alya Samokhvalova, and Non-Executive Directors Johnny Smith and Angelica Phillips.
Prosperity Capital Management proposed the appointment of Michael Kavanagh to the board, which was approved. However, the passing of the Everest director removal resolution means Petropavlovsk must remove him as a director.
Prosperity's other resolutions, to re-appoint Damien Hackett and Harry Kenyon-Slaney, as well as to appoint Vitaliy Zarkhin, failed.
Following the requisitioned meeting, Petropavlovsk's board consists of James Camerson, Maksim Kharin, Harlotte Philipps, and Katia Ray.
By Anna Farley; annafarley@alliancenews.com
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