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TORONTO – Activist investor George Armoyan is poised to take on Sherritt International Corp. in a proxy fight after attempts to reach a settlement with the Toronto-based miner fell apart.
Mr. Armoyan was livid on Thursday after meeting with Sherritt chairman Hap Stephen and board member Peter Gillin. In an interview following the meeting, he said the two men were unwilling to consider any of his proposals. He said he thought they could reach a compromise in which he would name one director and the two sides would jointly choose another, but that Sherritt reneged on the potential plan.
Mr. Armoyan went on to blast the entire board for allegedly enriching themselves while failing to create value for shareholders. “There’s no proper Canadian corporate governance standard that these guys meet. Nothing,” he said.
He said the directors only hold minimal shares, but are earning higher salaries than directors of some global giants. He also accused them of numerous other excesses, including buying an expensive private company jet and spending lavishly on board meetings in London. He pointed out that one director, Sir Richard Lapthorne, recently dumped $500,000 of Sherritt debentures, leaving him with none.
“The type of abuse that exists in this company is mind-boggling,” Mr. Armoyan said.
Sherritt denied Mr. Armoyan’s claim that it rejected his request for board representation. In a statement, the miner said it was prepared to consider him as part of its normal nomination process, but that he “declined to participate” in the process. “We are considering Mr. Armoyan’s requisition for a special general meeting and will respond to that in due course,” the company said.
Sherritt has already hired proxy solicitation firm Kingsdale Shareholder Services as well as law firm Davies Ward Phillips & Vineberg LLP to defend itself in a proxy fight, according to Mr. Armoyan. That suggests the company is ready and willing to take him on.
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