[miningmx.com] – BOARD room tussles are hardly new to the mining sector. Remember the conflict between former BHP Billiton chairman Don Argus and CEO, Brian Gilbertson? It happens at the highest level.
Mwana Africa is currently involved in its own board fight after shareholders controlling 29% of the company launched a bid aimed at overhauling the UK firm’s management.
Yat Hoi Ning, a non-executive director on the board, has a 7.6% stake in Mwana Africa, according to the company’s website, whilst the company he chairs, China International Mining Group owns another 21.4% in Mwana.
The story is that Ning demanded he be made chairman of Mwana as this would properly represent his and his firm’s economic interest in the company.
The view from Mwana is that his chairmanship was practically difficult to award to Ning primarily owing to the fact he couldn’t speak English. “How would he lead a board debate?’ a market source asked Miningmx.
As a result, a middle ground was offered in which Ning would become chairman provided a lead independent non-executive director continue to run board meetings.
It was at this point that Ning and China International Mining Group began to agitate for the removal of certain directors including non-executive chairman, Stuart Morris, formerly finance director of Nedbank Group, and Johan Botha, formerly of AngloGold, Gold Fields and Banro.
That’s the back-story to the petition that’s been drawn up against Mwana Africa claiming the re-appointments of these directors had been illegally obtained.
Earlier this week the court action was extended to two additional non-executive directors – Ngoni Kudenga, a chartered accountant who founded his own business in Zimbabwe and Herbert Mashanyare, formerly of Rio Tinto Zimbabwe.
Mwana Africa CEO, Kalaa Mpinga, declined to comment on Ning’s ulterior motives, but market sources say Ning is suspected of seeking to either want to take over the company or attract a suitable offer that enables him to leave with his initial investment in Mwana intact.
Ning bought in at Mwana Africa at about 5.5 pence per share against a current share price of 2.1 p/share so it’s unlikely he will be paid for his initial capital plus the interest he also requires.
Mpinga said that a thorough due diligence had been conducted before the company accepted new major investors, especially those seeking board appointments.
In the meantime, the Mwana board will continue to operate in the interests of shareholders. Mpinga cites progress made with plans to raise a bond to pay for the reopening of the Bindura Nickel Company smelter, details of which should be available by month-end.
What’s possible is that Mwana seeks fresh investors worth up to 30% of the firm. That might be a difficult call given the struggle junior miners are facing in the current market conditions.
