LONDON, Aug. 11, 2020 /PRNewswire/ -- Prosperity Capital Management ("Prosperity"), a leading Russia-focused asset manager that controls approximately 17 per cent of the outstanding share capital of Petropavlovsk PLC ("the Company"), today commented on the results of Petropavlovsk's Extraordinary General Meeting ("EGM").
Prosperity's EGM requisition provided Petropavlovsk's minority shareholders with enhanced information and notice to make an informed decision with respect to the future of the Company which resulted in higher levels of shareholder participation than at the annual general meeting ("AGM") just six weeks ago. Prosperity is disappointed, however, that the recently enlarged aggregate size of the Everest Alliance ("Everest") – JSC Uzhuralzoloto Group of Companies ("UGC") holdings enabled them and their affiliates to overwhelm the ballot box. In so doing, they drowned out both the voices of minority shareholders and the recommendations of leading independent proxy advisors Institutional Shareholder Services and Glass Lewis.
As the EGM only returned the Board comprised of the four directors who were elected as the result of an underhanded action by certain shareholders at Petropavlovsk's annual general meeting in April, it is absolutely critical that it demonstrates to Petropavlovsk shareholders that it is committed to best-in-class corporate governance as prescribed by the UK Corporate Governance code. Specifically, and before any important decisions are taken, the Board should immediately commence a search for additional independent non-executive directors. Only by doing so in a transparent manner, including robust shareholder consultation, can the Board assure shareholders that it is free from the influence of Everest and UGC.
Commenting on the outcome of the EGM and the need for best-in-class corporate governance at Petropavlovsk, Alexander Branis, Chief Investment Advisor at Prosperity, said:
"This is a disappointing result, but we remain unbowed. We had many positive discussions with our fellow minority shareholders in the run-up to the EGM all of whom affirmed our position that Petropavlovsk deserves a strong, independent Board that will help ensure that the Company's intrinsic value is not masked by poor governance. 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. We will continue to engage with Petropavlovsk shareholders, management, and the Board to ensure that governance enables rather than impedes sustained value creation."
About Prosperity Capital Management
Founded in 1996, Prosperity Capital Management is a leading Russia-focused asset manager controlling assets of around USD 4 billion on behalf of pension funds, endowments, foundations, family offices, sovereign wealth funds and high net worth individuals from across Europe, North America, Middle East and Australasia. The firm employs a long-term, fundamental value, active and engaged shareholder approach to access the public equity investment opportunity amongst Russian and Former Soviet Union companies.