LONDON (Reuters) - Petropavlovsk has said it will remove the board member representing the Russian gold miner’s biggest shareholder Kenges Rakishev, ratcheting up tensions between rival investor groups over management of the company.
In a notice for its annual meeting on June 29, London-listed Petropavlovsk proposed removing Rakishev’s nominated director Bektas Mukazhanov.
“Upon delivery of the notice to Mr Mukazhanov, the office of his directorship will be vacated, and he will cease to be a director of the Company,” Petropavlovsk said in a statement.
Rakishev, a Kazakh entrepreneur, and two other investors CABS Platform and Slevin, have been pushing for Pavel Maslovskiy to return as CEO of the company. He resigned in July last year after a shareholder revolt.
But Petropavlovsk wants to keep the current management and does not want Maslovskiy back as CEO.
The miner wants to remove Mukazhanov from the board because he also works for Fincraft Holdings Ltd, a company owned by Rakishev, which Petropavlovsk says is a conflict of interest.
Mukazhanov told Reuters he was surprised at his removal and said that the ongoing conflict was a distraction for the board.
“The duty of the board is to develop the business, not focus on conflicts and relationships with shareholders,” he said.
“The conflict they see is not from a business perspective - it’s from personal positions.”
Petropavlovsk also said its board wanted to know the identities of the parties behind CABS and Slevin, which together own 9.1 percent of the company and have offshore addresses in Panama and Anguilla, according to Thomson Reuters data.
Reuters has not been able to reach them.
“It is simply not credible that two entities, organized in tax haven jurisdictions, and apparently not otherwise involved in any other business dealings and particularly not involved in the mining industry, have invested approximately 20 million pounds ($26.64 million) ‘out of the blue’ in a Russian gold mining company,” a Petropavlovsk spokesman said in an email.
Petropavlovsk’s share price has collapsed from highs in 2008, although it has rallied from its lows in 2015-16 when commodity markets crashed. It was down 1.2 percent at 1143 GMT.
Rakishev said on Thursday he had lobbied for the return of Maslovskiy before the current Chief Executive Roman Deniskin was appointed in February.
“Since I acquired a stake in Petropavlovsk I have said repeatedly that I am concerned the company lacks vision,” Rakishev said.
“Rather than seeking to damage Petropavlovsk further, I encourage the board to recognize they have lost the support of the majority of shareholders and step down.”
The battle is heating up just as the company is on the verge of completing a decade-long quest that will allow it to start extracting previously trapped gold.
Petropavlovsk is close to bringing on technology to boost profits from the treatment of refractory gold ore, which is very hard to process using traditional methods.
The company has asked British regulators to investigate CABS and Slevin to see whether they have a relationship with any of the company’s other shareholders, or the three nominee directors: Maslovskiy, Roderic Lyne and Robert Jenkins.
Maslovskiy has said he was not connected to the two investors. The other two nominees could not immediately be reached for comment.
Reporting by Barbara Lewis and Dasha Afanasieva. Editing by Jane Merriman