TORONTO (miningweekly.com) – Russian steelmaker Severstal and Endeavour Financial, the merchant bank chaired by Canadian mining mogul Frank Giustra, traded public barbs on Tuesday, each accusing the other of trying to take control of London-based Crew Gold.

Both companies have large holdings in the gold producer, and Endeavour said it had reported Severstal to a local securities regulator on concerns of “market manipulation”, which Severstal dismissed as “completely without merit”.

In January, Endeavour announced it had bought 37,88% of Crew shares, and would lend financial and operational support to help the company improve operations at its flagship Lefa mine, in Guinea.

In exchange, Endeavour would get three seats on Crew's six-person board.

A month later, Severstal said it had increased its holding in Crew Gold to 26,59%, and would make an offer for the remaining shares in the company, prompting Endeavour to increase its own stake, which now stands at around 43%.

Severstal complained about Endeavour's purchase to the Ontario Securities Commission, the British Columbia Securities Commission (BCSC) and the TSX, but the BCSC ruled to dismiss the complaint.

The next twist in the tale came on April 1, when Severstal said it was dropping its takeover offer, and would instead call for a shareholders meeting to reconstitute Crew's board of directors.

It accused Endeavour, with its board seats, of exerting “undue influence” on the company without making a takeover offer, and said it had the support of shareholders holding another 23,53% of Crew.

Now, Endeavour says it has filed an application with the BCSC to “intervene in the face of recently exposed activities of Severstal in respect of Severstal's attempt to gain control of Crew Gold”.

Endeavour has asked the securities regulator to investigate the actions of Severstal and its “partners” on suspicions of market manipulation and contravening securities laws.

If Endeavour gets its way, Severstal and its partners will be banned from trading in or buying Crew shares, and forced to sell up to 30,33% of the Crew shares or be restricted in voting those shares.

But Severstal shot back what it called Endeavour's “misleading statements”, and said the complaint to the BSCS is “completely without merit.”

“Severstal is not acting jointly or in concert with any other person in connection with Crew Gold and, therefore, Endeavour's references to the "Severstal partners" in the press release are inaccurate and misleading,” the company said.

“Severstal's contact with other Crew shareholders was limited to determining their support for a requisition of a special meeting and no agreement, commitment or understanding of any kind exists between Severstal and any of these shareholders.”

Shares in Crew Gold rose 3,9% on Tuesday, to C$0,40 apiece by 15:59 in Toronto.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.