Petropavlovsk's (POG) future is up in the air after rebel shareholders fought off a comeback attempt by the now-former management.
The gold miner's management called the extraordinary meeting in order to vote back in directors kicked off the board on 30 June. Company founder and long-time chief executive Pavel Maslovskiy lost his spot in the shock move then, and has now failed to get back on to the board. Former chairman-designate Fiona Paulus decided in the intervening weeks that she did not want to take the top board spot.
After the meeting on Monday 10 August, the board, with four members, has now committed to a forensic investigation into all transactions and arrangements over the past three years. The overhaul comes at a time when gold is at record highs and production is climbing.
The vote was very close, with the key resolution passing by 50.58 per cent to 49.42 per cent. Most of the former directors voted off in June received around 45 per cent backing. Even if they had been appointed, the aforementioned resolution 18 - which got through with 50.58 per cent support - would have kicked them off anyway, as it was designed to remove any director not appointed at the 30 June meeting.
The winners are Petropavlovsk's largest shareholder UGC, a fellow Russian gold miner owned by billionaire Konstantin Strukov, and Everest Alliance, represented by Nikolai Lioustiger.
In a statement, UGC said that it acted against the board because it was not up to scratch.
"UGC’s clear objective as a shareholder in Petropavlovsk is to seek to enhance the independence of the board of directors and the commercial effectiveness of the management team, thus ensuring a rigorous focus on the company’s core business and operational efficiency," the company said.
UGC said that it would appoint a recruiter to find a chief executive, chief financial officer, chief operating officer and more non-executive directors.
The previous Petropavlovsk management said that UGC wanted to take over the company without paying shareholders fairly.
Under Mr Maslovskiy, Petropavlovsk had a near-death experience while financing and building a pressure oxidation plant to process the refractory ore. But in the past year its share price has tripled from 10p.
This is the second time Mr Maslovskiy has been ousted. Everest Alliance came to his rescue in 2018 before turning against him and existing management this year.
Fellow major shareholder Prosperity Capital Management called the meeting result "disappointing" and said it would keep fighting.
"We do not intend to stand by as control of our company is surreptitiously transferred to Everest and UGC, the latter of which claimed that it wanted a board comprised of truly experienced, diverse, and independent directors which we now clearly do not have," said Prosperity chief investment advisor Alexander Branis.
The new directors are James Cameron, Maksim Kharin, Charlotte Philipps and Katia Ray.
Advisory firm ISS had said before the vote that shareholders should back the former directors to come back and reject Everest's appointees. Both Everest and Prosperity have made complaints to the UK Takeover Panel.
Petropavlovsk's share price was down 2 per cent on the news.