Russian gold miner Petropavlovsk appointed four new directors and asked British regulators to look into possible breach of the takeover code by a major shareholder, as it battles to keep control of the company.
Shares in the company, which have more than doubled this year, sank 12% by 1200 GMT.
The company’s CEO, CFO and three other board members were voted out at an AGM by top shareholders Uzhuralzoloto Group of Companies (UGC), Everest Alliance, Slevin Ltd and Fortiana Holdings after the four agreed to reappointment them in May.
The four shareholders controlled 39% of Petropavlovsk at the time of voting.
“It has become clear to us that they were trying behind the back of other shareholders to take control of the company,” said CEO and executive director Alya Samokhvalova, referring to the voting down of board members.
The expanded interim board, appointed within days, will ensure continuity and prevent disruptions to operations in the lead up to a second AGM which will be held within three months, she said.
“Hopefully (at the AGM) will be an informed decision by all shareholders so that they won’t see their company taken for peanuts after they were waiting for so many years for the success,” said Samokhvalova.
Petropavlovsk asked Britain’s Takeover Panel to investigate whether UGC breached a rule requiring investors to make a mandatory offer to the other shareholders.
UGC denied any wrongdoing in a statement.
Petropavlovsk founder Peter Hambro was reinstated as chairman after he was ousted in 2017. Another boardroom reshuffle occurred in 2018.
Analysts at Peel Hunt said in a note the removal of the four directors was aimed at controlling Petropavlovsk’s Russian processing hub, the only one in the country that can processes refractory ore and has spare capacity.
Many gold deposits in Russia mine refractory ore, from which it is hard to extract gold using traditional methods.