Corporate governance firm backs Mwana Africa board ahead of crunch EGM

Corporate governance firm backs Mwana Africa board ahead of crunch EGM

HARARE, May 28 (The Source) – An international corporate governance advisory firm has backed the board of Mwana Africa in a tiff with activist minority shareholders who want to eject four non-executive directors of the resources firm at next month’s extraordinary general meeting (EGM).

The minority shareholders, calling themselves the ‘Concerned Shareholders Group’, led by Ian Dearing and others holding about 5,1 percent of Mwana’s issued share capital, requisitioned for the EGM on June 9 to, among other resolutions, remove interim non-executive chairman Stuart Morris, Johan Botha, Ngoni Kudenga and Herbert Mashanyare and replace them with Scott Morrison, Mark Wellesley-Wood, Oliver Barbeau and Anne-Marie Chidzero.

The minorities are alleging failed corporate governance at the company after Mwana fell out with its largest shareholder China International Mining Group Corporation (CIMGC) and Yat Hoi Ning, a Non-Executive Director and chairman of CIMGC, over board seats. The matter has spilled into the courts but the petition has been suspended until June 15 this year to enable the parties to reach an agreement.

CIMGC and Ning, who held a combined 29 percent of the gold and nickel miner’s issued share capital, have since reduced their joint stake to 15 percent and are not part of the requisition.

The minorities also decried the fall in the company’s valuation, arguing that it was now worth ‘approximately 10-15 percent’ of the over £200 million shareholders have invested in the group since its inception.

But the United Kingdom-based Institutional Shareholder Services Inc. (ISS), a leading provider of corporate governance solutions and governance research, has published a report recommending that shareholders vote against of the requisitioned resolutions at the EGM.

“The dissident’s main argument is that the current directors have been unable to settle the dispute with the company’s largest shareholder without going to court. It is unclear, however, why the dissident nominees would be better able to reach such a settlement,” ISS said in a statement posted on Mwana Africa’s website.