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Row breaks out over plans to shake up Petropavlovsk board
A row has broken out between mining company Petropavlovsk and some of its major shareholders over plans to shake up the firm’s board, amid claims that chairman Peter Hambro had been forced out.
Mr Hambro announced Monday morning that he would be leaving his post at the Russian-focused gold miner, 14 years after he founded the company. He will remain as an executive director while the company completes its turnaround.
But in its statement to the Stock Exchange, Petropavlovsk said it “questions the independence” of nominees for board positions put forward by some of its most prominent shareholders, pointing to the “significant achievements” of the current board which has improved the firm’s fortunes.
Mr Hambro’s decision to stand down comes after three Petropavlovsk shareholders, including Renova, the industrial conglomerate led by Russian billionaire Viktor Vekselberg which has gold mining assets in the same region as Petropavlovsk, said they would vote against him at the company’s annual meeting next month.
Renova, along with fellow shareholders M&G and hedge fund Sothic, has also proposed four new board members for Petropavlovsk - a move which Mr Hambro said is “not in the interest of shareholders as a whole”.
Renova has proposed Bruce Buck, veteran lawyer and chairman of Chelsea Football Club, and Vladislav Egorov, while M&G and Sothic together have proposed Ian Ashby and Garrett Soden, citing corporate governance concerns as a reason for the planned shake-up.
Petropavlovsk advised shareholders to vote against the proposals at its annual meeting next month, adding: “The board also questions the independence of the remaining nominees given their relationship and/or engagement with companies in which the requisitioning shareholders have invested.”
Mr Hambro yesterday said his primary concern was “protecting the interest of all shareholders, not a few” and implied that the firm’s other shareholders could view this as the start of a takeover bid from the three firms.
“There are two traditional ways of doing a takeover,” he said. “One, you say I like that company and I’d like to buy it, and we’ll pay this for it which represents fair value, or two, you force some of your assets into the company to give you a bigger stake.”
He added that shareholders needed to make up their own minds at the company’s upcoming AGM.
Mr Hambro founded Petropavlovsk in 1994 as an Anglo-Russian venture to develop a gold mining project in the far east of Russia. Just last month the company returned to the black, with a pre-tax profit of $27m (£21m) in the year to December, compared to a loss of $141m the year before.
M&G and Renova declined to comment. Sothic did not respond to requests for comment.