LONDON (Reuters) - Investors in London-listed gold miner Petropavlovsk (POG.L) should reject a plan to overhaul the board at the company’s annual general meeting next week, leading shareholder voting advisors said.
Three top shareholders, who together own more than 30 percent of Petropavlovsk, have put forward resolutions aimed at replacing Chairman Peter Hambro, who set up the Russian-focused miner in 1994.
Citing corporate governance failures, the rebel shareholders are also seeking to replace three non-executive directors with their nominees.
Shareholder advisor ISS said in a report seen by Reuters that “in the absence of detail that would lend weight to the requisitionists’ claim of inadequate corporate governance controls, support for the shareholder nominees is not warranted at this time”.
Another advisor Glass Lewis shared its view.
“In our view, the dissidents’ arguments lack the substantive detail and refinement that we would expect from a campaign seeking to replace a majority of the board,” it said in a report.
Both ISS and Glass Lewis advise investors on which way to vote at AGMs.
Hambro has accused the rebel shareholders of pursuing “a takeover by stealth” led by Russian billionaire Viktor Vekselberg.
Petropavlovsk returned to profitability in 2016 after restructuring to tackle its debts.
The resolutions put forward by the three shareholders - Veselberg’s conglomerate Renova along with M&G and Sothic - seek to replace four of six board members, including Hambro, who has said he will step down as chairman, but stay on the board as an executive director.
The ISS report included a statement from Renova saying “the current board lacks the requisite focus on corporate governance and does not endorse the principle of good governance that should be followed by a public company”.
A separate statement in the ISS report from M&G and Sothic referred to “multiple strategic mistakes made by Petropavlovsk over the course of 2014, 2015 and 2016, which have significantly destabilised the business and delayed its recovery”.
Petropavlovsk announced last month that Andrew Vickerman would become interim non-executive chairman after the June 22 AGM and has appointed recruitment specialists to find a permanent replacement for Hambro.
Petropavlovsk’s share price has recovered to around 8 pence from a low of around 5 pence in early 2016.
Additional reporting by Simon Jessop; Editing by Susan Fenton