Simmers shareholder calls for board change

Allan Seccombe | Mon, 16 Nov 2009 18:26
[miningmx.com] -- SIMMER & JACK’S empowerment partner Vulisango is dangling a rather juicy carrot in front of shareholders to entice them to vote in favour of a proposed removal of four directors at an extraordinary shareholders meeting and to appoint a high-powered group of people.

Among the people Vulisango has spoken to and persuaded to join the board as independent non-executive directors if it manages to remove four directors are former Harmony Gold CEO Bernard Swanepoel, who would be chairman; David Brown, CEO of Impala Platinum; Stuart Murray, CEO of Aquarius Platinum and the former head of African Rainbow Minerals’ coal division William Osae.

In a letter to the Simmers board on 13 November calling for an extraordinary general meeting (EGM), Vulisango outlined its grievances over the way the junior gold company was being run, its unhappiness with the board, its business decisions. It wants Gordon Miller, the CEO, Nigel Brunette, chairman, Adrian Meyer and John Berry to be removed.

“Vulisango believes that the people listed would constitute a board of international reputation and integrity, keen to look at proposals to take advantage of an opportune time for consolidation in the sector; restructure the company, comply with the letter and spirit of the law, ensure transparency and improve operational performance to the benefit of all shareholders,” it said.

Vulisango, through its wholly owned Xelexwa Holdings (formerly Jaganda), has about 22% of Simmers’ shares, allowing it to call for the EGM, the date of which must be declared within 14 days of the letter reaching the board and then held within 21 days thereafter.

Simmers issued a statement late on Monday saying it had received the letter and was reviewing it. It added it was making progress in identifying historically disadvantaged South Africans to replace the four people who left in October.

“Simmers would like to reassure its shareholders, employees and other stakeholders that the press release issued by Vulisango Holdings (Pty) Limited on 16 November 2009 contains inaccuracies and is intentionally misleading,” said Simmers’ director of gold operations Deon van der Mescht, adding more details would be given on 19 November at its results presentation.

Vulisango is deeply unhappy with what it calls “poor governance”, “a series of poor operational decisions” and a “litany of broken promises.”

Concerns were raised that Miller is domiciled in Canada despite the company’s assets being in South Africa. He and Burnette also serve as CEO and chairman of First Uranium in the same positions. Simmers has sold its stake in First Uranium down to around 37% from 53% without shareholder approval.

“I think it was an atrocity that Simmers diluted itself down like that in First Uranium. It’s a really great asset they had there,” said Swanepoel.

Swanepoel told Miningmx he and the other proposed board members had spoken to each other and agreed to Vulisango’s proposal. “I’m flattered and honoured to be included in such company and they’ll make it easier for me to come to terms with the challenge,” he said.

Asked about who would replace Miller if he was voted out of the chief executive position, Swanepoel said: “If you look at the ease with which they put together a top class board I don’t think there will be a battle to fill positions to the extent they may exist.”

Murray resigned from the Simmers’ board in September when chairman Nigel Brunette said four directors were to be removed in terms of Section 220 of the Companies Act because they had “unresolved conflicts of interest which have resulted in breaches of their fiduciary duties.”

Murray said at the time he quit because he disagreed with the decision to remove the four black economic empowerment (BEE) directors. The four were deputy chairman Baba Njenje, Siviwe Mapisa, Ayanda Sisulu-Dunstan and Kevin Wakeford. The first three are Vulisango appointees to the board.

Brunette told Miningmx at the time that, while Wakeford was supposedly an “independent” director, his actions made it clear he was, in effect, another Vulisango appointee.

Implats’ Brown had also served on the Simmers’ board as a non-executive director but resigned early in 2008.

Among those Vulisango is proposing for the reconstituted board are Wakeford and Njenje along with De Wet Schutte, a former Harmony man, and Peter Surgey, a non-executive director at Nampak. Vulisango wants to retain chief financial officer Gerrit Jacobs and Martin Oberholster, who represents Rand Merchant Bank, an 11% shareholder in the company.