Africa – Mwana Africa, the Pan-African multi-commodity mining group, announced on Tuesday that it is to hold an extraordinary general meeting (EGM) on 9 June 2015, to allow its shareholders to vote against attempts by former chairman Mark Wellesley-Wood and associates to take control of the company.
The EGM has been requisitioned by a group of minority shareholders owning 5.1% of the company’s shares, which Mwana believes will be used by Wellesley-Wood and associates to unseat four of the company’s independent non-executive directors.
As a result, the Mwana board advises shareholders to vote against any of the changes or appointments proposed by the minority shareholders.
In the statement, Mwana says the minorities allege corporate governance failures by the existing board, allegations which are strenuously rebutted by the board, who points to the rapid rate of development under its watch, as compared to the earlier period.
Wellesley-Wood vacated the chairmanship at the unanimous request of his board colleagues who believed the company needed imaginative leadership to guide it through the process of restructuring and growing.
Since Wellesley-Wood’s departure, Mwana has consolidated its position. Costs have been reduced across the company, aided by the voluntary halving of his fees by present chairman, Stuart Morris, who will be retiring from the board before or during the EGM.
Under Morris’ board, Mwana has quickly developed a programme of restoring and developing operations at the Freda Rebecca gold mine and at the Trojan nickel mine operated by 74.73%-owned subsidiary Bindura Nickel Corporation (BNC). Nickel developments have included the pending re-start of BNC’s nickel smelter.
The restart is being financed in part through a $20 million bond, the first Zimbabwean bond with prescribed- and liquid-asset status to be issued by a mining company. The bond attracted strong institutional support that reflects investor confidence in Mwana’s existing management.
The intention of the minority is to replace the four new independent directors with four of their own choosing. As it is, the existing board has been structured to represent the company’s diversity, particularly reflecting the international spread of assets and in compliance with the indigenisation expectations of Zimbabwe, the country that hosts Mwana’s principal mines.
The four non-executive directors whom the minorities wish to oust are truly independent of any interest, particularly those of China International Mining Group Corporation (CIMGC), Mwana’s majority shareholder.
At present the company and CIMGC are seeking an amicable settlement of a dispute; a dispute that has been seized upon by the petitioners as supporting the demand to replace existing independent directors with others believed to be associated with CIMGC, Mwana said in the statement.
The statement goes on to say that: “With the exception of Wellesley-Wood, the replacement directors being proposed are neither known to the company nor to its nominated advisor, Peel Hunt, which must verify the directors’ independence in terms of the regulations of the London Stock Exchange. Repeated requests by Peel Hunt for clarity have been answered with inadequate information, leading to the possibility that the nominated advisor will resign its appointment meaning that the company’s AIM listing would immediately be suspended.”