Mystery Shareholder Revealed in Battle Over Russia’s Richest Gold Mines

- June 18th, 2018

Cryptocurrency executive Evgeny Khata has revealed himself to be one of the mystery shareholders that wants to revert back to Petropavlovsk’s previous management team.

Russian gold miner Petropavlovsk (LSE:POG) is at the center of a fight between a European scion, a Kazakh tycoon and mystery shareholders.

But now Evgeny Khata, one of the mystery shareholders, has identified himself. Khata has stepped forward to explain his criticism of Petropavlovsk and why he and others support Pavel Maslovskiy, a co-founder of Petropavlovsk who resigned last year following partner Peter Hambro’s forced removal.

Both a cryptocurrency executive and an author, Khata is just one of the many investors linked to CABS Platform, which holds shares in Petropavlovsk.

 

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Khata and the other shareholders are leading a fight to oust the company’s current board, and last week Petropavlovsk demanded the shareholders reveal their identities and stop hiding behind a “cascade of shell companies and offshore trusts.”

Khata has decided to do just that, while continuing his criticism of Petropavlovsk and its efforts against its shareholders. He told Bloomberg the company is trying “all doubtfully legal methods to blacken shareholders and prevent democratic vote at the annual meeting.”

He also asserted that there are zero shareholders who stand behind Petropavlovsk as it is currently being run, and added that bringing back Maslovskiy would bring the company, which is currently worth about US$350 million, back to a “multi-billion dollar” organization.

“All that is being done by the current board is to try to distract shareholders from the fact that Petropavlovsk needs to change the management,” he said, adding, “any educated person can understand that the company is strongly underestimated and has a great growth potential.”

According to Bloomberg, Petropavlovsk has cut gold output in recent years to focus on more profitable ounces, a plan that seems to be working so far. Last year, the company reported its highest net income since 2012, with hopes that a new processing method could allow mining of more complicated ores.

 

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Petropavlovsk announced last Friday (June 15) that it met with Maslovskiy and Hambro, the pair of founders that resigned last year, as well as former board members Roderic Lyne and Robert Jenkins, to see if they would be willing to return to the company. But it is not clear if the current management would actually like this to happen.

The company stated, “[t]he board has sympathy with our shareholders who may be confused by the latest disclosure and it is gravely concerning to the board that there is simply no way of knowing whether the motive of CABS and Slevin is to acquire control of Petropavlovsk by stealth at a discounted valuation or what other nefarious objectives they may have.”

On Monday (June 18), the company said that two shareholder advisory firms, Institutional Shareholder Services and Glass Lewis, have recommended that investors support the current board at a shareholder meeting next week. They have also advised voting against the election of Maslovskiy, Lyne and Jenkins.

According to Petropavlovsk’s press release, Glass Lewis is basing its recommendation on the company’s “poor performance” under the previous board.

Despite the back and forth between the company and the shareholders, it will more than likely come down to Kenes Rakishev, the Kazakh tycoon who holds a 22-percent stake in Petropavlovsk, to make the final decision. At 12:55 p.m. EST on Monday, shares of Petropavlovsk were trading at GBX 8.20.

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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.  

 

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