Podcast Center
Video Center
Webcasts
Resource Center
Events
July 31, 2006 at 08:00 PM
LONDON (HedgeWorld.com)–North Sound Capital, a Greenwich-based hedge fund, has led a shareholders’ revolt delivering the coup de grace to the non-executive chairman of African Platinum (Afplats), a small-cap mining exploration company listed on the Alternative Investment Market.
At an extraordinary shareholders meeting Tuesday [July 25], shareholders voted to oust Charles Hansard by a 53% to 47% margin in spite of his having the unanimous backing of the company’s board of directors. Subsequently, Independent Non-executive Director Dr. Mark Bristow announced he will quit effective Aug. 4 “as he does not agree with this removal ?? 1/2 and is resigning in principle.” Brian Morris, an experienced mining company executive, has been appointed interim chairman.
North Sound threw down the gauntlet in a petition for the meeting launched on July 11. Since the hedge fund operator had 10.1% of the stock it was able to force Afplats’ board to call the meeting to consult shareholders.
Among the backers of Mr. Hansard and the existing board was minority shareholder Thomas S. Kaplan, a Geneva-based investor. Indeed, such was Mr. Kaplan’s support that he spent in excess of $200,000 buying full-page advertisements in July 25 editions of the Financial Times and the Wall Street Journal to publish a 5,000-plus word panegyric entitled “Setting the Record Straight ?? 1/2 “
In its July 11 motion statement sent to shareholders, North Sound argued Mr. Hansard was getting paid too much, lacked “proven industry experience,” and that the company’s share price performance had been unacceptable. “Since the Company’s last equity financing in September 2004, the Company’s share price has significantly underperformed the share price of directly comparable companies,” North Sound said. “Of the comparable platinum companies,” according to a statement on its web site, “only the Company’s share price has underperformed the price of platinum.” The share price of Afplats closed up 0.25 pence at 30.5p on July 25–just 0.5p above the 2004 financing.
