Petropavlovsk chairperson Peter Hambro
LONDON – Investors in London-listed gold miner Petropavlovsk should reject a plan to overhaul the board at the company's annual general meeting next week, leading shareholder voting advisor ISS said.
Three top shareholders, who together hold more than 30% of the company, have put forward resolutions aimed at replacing Petropavlovsk chairman Peter Hambro and three non-executive directors with their nominees, citing corporate governance failures.
ISS, in a report seen by Reuters, said 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".
ISS advises investors on which way to vote at AGMs.
Hambro, who has headed the Russian-focused miner for decades, has accused the rebel shareholders of pursuing "a takeover by stealth" led by Russian billionaire Viktor Vekselberg.
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 Vekselberg's conglomerate 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.
The company returned to profitability in 2016 after restructuring to tackle its debts. Its share price has recovered to above eight pence from a low around 5p in early 2016.
Since the start of the year, it has gained 15%.