Peter Hambro, the co-founder of gold miner Petropavlovsk, has lost the battle for his seat on the board at its annual general meeting (AGM) today.
A group of shareholders with a combined 40 per cent stake in Petropavlovsk led a resolution to oppose the re-election of Hambro and three other non-executive directors. The stakeholders had complained about corporate governance issues.
Four new directors were appointed to the board, two of whom were proposed by the firm’s largest shareholder, Renova, and two by shareholders M&G, Sothic and DE Shaw.
Hambro slammed the newly appointed directors for not showing up to the AGM, but he said he was "gratified" by the support he received from the company's small shareholders.
Investors at the AGM were upset about the lack of clarity and straightforwardness they had received from the rebel shareholders about how the new directors will run the company, Hambro said.
Renova, M&G and Sothic had been accused of plotting to take over of the company by implementing a new board, but last week the UK's Takeover Panel said they were not working in concert to take control of Petropavlovsk.
Hambro said he is proud of what he's done, including bringing the company back into profit this year. "I leave it in very good shape," he said.
"The tough decisions we made as a board over the past several years were necessary for ensuring stability and future growth.
"I believe those decisions have been vindicated by our emphatic return to profitability this year and by our most recent exploration results."
Petropavlovsk has lost more than 99 per cent of its market value since its 2010 peak when it was valued at over £2bn.
He added: "I am not someone to leave any job half done, and I hope with all my heart that our new board does not manage to upset the excellent progress we have made."
Hambro said he will advocate for transparency, diligence and good corporate governance as a shareholder in Petropavolvsk going forward.
Jonathan Morris, corporate partner at Thrings solicitors, said: “On the face of things the ousting of Peter Hambro at this afternoon’s AGM is a victory for shareholders trying to ensure good corporate governance. However, the matter may not be as clear cut as this.
“It will be interesting to see whether all shareholders benefit in the long-term from the changes made at board level made today. Also although the Takeover Panel recently decided that the requisitioning of the resolutions to appoint certain new independent directors was not a board control-seeking action, the Panel may revisit the matter if it believes the new directors start to behave in a manner that suggests they may not be independent of the shareholders that proposed them."