Petropavlovsk Share Discussion Threads

[lawrence thirteen] 23/11/2020 13:45

Why do people provide links to articles behind paywalls, what's the point?

[undervaluedassets] 23/11/2020 12:19

Never mind the background boardroom/management problems

Those problems will be as nothing because of the gold price. And gold is firmly in a medium-term downtrend

As a result all gold stocks are going down; And for those with narrow margins the situation will be becoming acute.

All in sustaining costs leapt for POG at last results so margins will be squeezed

[stevea171] 23/11/2020 10:50

Support at 25p then 20p. Falling knife.

[jp2011] 23/11/2020 10:18

It will take KPMG 3-6 months to investigate and that uncertainty will undermine the share price. Offsetting should be higher production from POX if they can get a good supply of third party ore.The current gold price has been supported by investors rather than retail & central bank so take Covid uncertainty away and gold drops probably to $900/oz before recovering to fair value $1000-$1200/oz.

[apple53] 23/11/2020 08:52

I have bought a teeny bit more this morning. Would love to say I am funding it with cleverly timed sales of bank stocks, but sadly sold most much too early.

[midasx] 23/11/2020 08:05

"The current Board is committed to transparency and exposing any historic instances of failed corporate governance, as well as to the recovery of any misappropriated funds or assets."

A lot of politics involved and no doubt trying to put the old board on the back foot and curtail their current destabilizing efforts in the POG subsidiaries in Russia.

[apple53] 23/11/2020 00:04

Another paywall article - Sunday Times on POG appointing KPMG to run the probe. Is this a leak and will we see an RNS Monday morning?

[wilmot] 21/11/2020 12:21

You can subscribe for free and get access to a limited number of articles. But in respect of the article below I wouldn't bother. Nothing significant re POG in the article.

[undervaluedassets] 21/11/2020 08:04

I do not want a subscription to the Times ...Can someone who has one precis what the article says.

Thanks

[stevea171] 20/11/2020 22:00

Strong boards are vital to protect shareholders from activist onslaught
Robert Jenkins. Monday November 16 2020, 12.01am, The Times

As a non-executive director of Petropavlovsk, a leading Russian gold miner and London listed member of the FTSE 250, I have been a ringside witness to changes of board control on three occasions in three years.

In June 2020, a private Russian mining group, UGC, succeeded as a 22 per cent shareholder in taking control. With allied shareholders, they together held 39 per cent of the share capital, and removed the chief executive Pavel Maslovskiy, who co-founded Petropavlovsk with Peter Hambro, the chief financial officer and most of the non-executive directors — including me.

This followed a quadrupling of Petropavlovsk’s share price from 2018 to this year and its stock market value rising above £1 billion.

Continue reading

[troy] 19/11/2020 15:49

I thought it was more positive Midas ! For the PLC company anyway.

The article was quite disparaging of Ermelenko and his attempts to hold on to what is not rightfully his.

[troy] 19/11/2020 11:30

Just a bit more info as to what is actually going on...........


Ex-managers of the gold mining company Petropavlovsk do not let it get out of the crisis

Publication date: November 17, 2020 at 22:05.
Category: Economy .

Last week, the Arbitration Court of the Amur Region refused to satisfy the claim filed by Sergei Ermolenko, a member of the board of directors of Malomyrsky Rudnik (part of the Petropavlovsk Group). The latter demanded nothing less than to declare illegal the decision of the general meeting of shareholders of the company, which decided to remove the old management (and Ermolenko as well) from the management of the company.

This was not the first trial that the former leaders of Petropavlovsk lost. Unfortunately, the litigation will clearly not end there.

According to Komsomolskaya Pravda , Sergei Ermolenko's lawsuit is obviously only part of a complex plan implemented by a narrow group of former owners and top managers in order to prevent the newly elected board of directors and, as a result, shareholders of the Petropavlovsk group from managing Russian assets and getting out as soon as possible. companies from the crisis.

It is emphasized that exactly the same plan was used several years ago in the course of the conflict between the same former owners and Viktor Vekselberg to obstruct the work of the legally appointed management.

The essence of the scheme is to try to minimize the ability of legitimate shareholders and the board of directors to influence Petropavlovsk's activities by creating an intricate system of ownership of subsidiary gold mining enterprises. Using gaps in legislation and personal connections in various authorities of the Amur Region, the former management of Petropavlovsk, through the hands of Ermolenko, creates a situation in which the board of directors is unable to fully control the Group's assets.

As a result, the company seems to continue to be managed behind the scenes by excluded management and former owners. Using Ermolenko as a judicial ramming, they sabotage decisions of legitimate shareholders in order to maintain control over cash flows and prevent the new management from real management and investigation of the activities of previous managers.

But it is precisely such an investigation, with the involvement of law enforcement agencies, unanimously demanded by the legal owners of Petropavlovsk. They suspect that the former management carried out large-scale machinations and brought the company multibillion-dollar losses.

Ermolenko and other ex-leaders of Petropavlovsk, apparently, really have something to be afraid of - law enforcement agencies are already studying the stories of the old team for its possible involvement in such serious crimes as gold smuggling, cashing in and withdrawing funds and assets abroad.

Such an investigation is unconditionally necessary, because for years a narrow group of people disposed of Petropavlovsk's funds at their own discretion, which is why the company has never paid dividends since 2012, despite the constant rise in world gold prices.

And the company's capitalization in the market fell dozens of times, and investors continued to be fed with promises.

[midasx] 16/11/2020 08:55

The new board are presumably trying to rationalise the complex structure of the various subsidiaries of POG, increase efficacies and improve profits by reducing costs. Ermolenko and Maslovsky's son are trying to use the courts to block the legally appointed board of POG carrying out this task and no doubt cutting off the gravy train flowing to the various constituent parts of the overly complex corporate structure of POG.

From Troy's link :-

The formal reason for the lawsuit was the change in the management of Petropavlovsk PLC in August 2020. After that, experts evaluated all actions of Ermolenko and Maslovsky as attempts to prevent changes in the composition of the management of subsidiaries, whose management, according to the participants in the process, sabotages the decisions of the elected Board of Directors of Petropavlovsk PLC. Presumably, the purpose of such actions is an attempt to prevent the new management of the company from checking the integrity of the activities of predecessors suspected of causing losses to the companies of the group.

It is important to note that although Petropavlovsk PLC can currently be classified as a fairly profitable, stable and promising company in the country, in terms of a number of key performance indicators it lags far behind its competitors in the industry. The company is increasing its gold production and sales, while its production cost is almost twice as high as that of the Polyus gold mining company - $ 800 per ounce against $ 394 per ounce. This, in the opinion of the Board of Directors of the company, may be the result of management mistakes and "dubious transactions", which will be investigated at the initiative of the Board over the previous 3-year period.

[undervaluedassets] 11/11/2020 10:49

RSH point me in the direction of one solid fact to back your claim...

[robertstronghand] 11/11/2020 10:35

For me this goes beyond just dislike of one man and reeks more of an attempt to cover up serious wrongdoing.

[troy] 11/11/2020 10:12

I won't post the whole text, but I was surprised at the sheer number of court cases. Links to them are in the text but you'll have to translate. Some of them have been consolidated and the next hearing appears to be November 24th.

[robertstronghand] 11/11/2020 09:40

Wee monkey that is the sort of mentally that has driven the Democrats to commit massive electoral fraud, the sort you really can't coverup, no matter how compliant the media. If the Democrats have nothing to hide surely they should welcome an investigation to disprove the many allegations already made, after all Trump put with Mueller and his twelve angry Democrats because he had nothing to hide, even though that was predicated with no evidence. The American people elect their President, it is not for others to decide, whether abroad, or ballot stuffing in polling stations in Milwaukee, Philly, Atlanta or Detroit.

[weemonkey] 10/11/2020 11:36

What a waste of time and money..

Has he no sense of dignity? A magnanimous concession in the face of substantial defeat would rescue him from his shameful ignominious stance.

History will rightfully remember Trump as an egotistical cxxt of the first order. His lack of grace when it comes to conceding an election he had clearly lost will make that a certainty.

And the laughter .. oh the laughter...

[robertstronghand] 10/11/2020 11:20

The actions are akin to Clinton and the Democrats refusing to accept the 2016 election. In 2020 there have been clear and multiple examples of massive voter fraud hence the investigations now started. As with the audit here, if there is nothing wrong then an investigation should be welcome.

[midasx] 10/11/2020 11:14

The actions brought are akin to Trump refusing to accept defeat and instigate legal proceedings to cause as much aggravation as possible!


The formal reason for the lawsuit was the change in the management of Petropavlovsk PLC in August 2020. After that, experts evaluated all actions of Ermolenko and Maslovsky as attempts to prevent changes in the composition of the management of subsidiaries, whose management, according to the participants in the process, sabotages the decisions of the elected Board of Directors of Petropavlovsk PLC. Presumably, the purpose of such actions is an attempt to prevent the new management of the company from checking the integrity of the activities of predecessors suspected of causing losses to the companies of the group.

The most important question is becoming a legal assessment: are the actions of Ermolenko and Maslovsky, who are members of the board of directors of Pokrovsky Rudnik JSC and a number of other Russian subsidiaries, but not their shareholders, unscrupulous. Presumably, they filed deliberately unfounded claims and applications for interim measures, which can be viewed as an attempt to prevent Petropavlovsk PLC from exercising the rights of a shareholder and participant in Russian subsidiaries.

In particular, in court hearings on October 29 and November 5 against LLC Malomyrsky Rudnik, LLC Kapstroy, LLC Temi, LLC Transit and LLC NPGF Regis, and representatives of the companies and a representative of Ermolenko himself, it was confirmed that in these cases lawsuits were filed for challenging non-existent corporate decisions and actions.

[robertstronghand] 10/11/2020 10:46

The important point is that this case has received federal attention. The idea chunks of Russian companies can just declare independence would not be a precedent anyone in Russia would want. I have concerns around Amur and what has been going on there, so that the Amur courts might go rogue, if they could, is a risk, but I don't think the higher ups elsewhere will allow this.

[troy] 10/11/2020 08:36

This article was published yesterday. It gives a bit of background on the interim court judgements against Petropavlovsk PLC brought by Ermelenko and Pavel's son at Pokrovski Rudnik. It's a bit hard going due to translation but it appears some interim measures have been lifted. .........



Side Effects of the Interim Measures Tool


The litigation over the assets of Petropavlovsk PLC is of great interest to the Russian media. It has acquired particular significance in the context of the international economic crisis: in this situation, it is extremely important to demonstrate the effectiveness of the mechanism of the modern judicial system in protecting enterprises that are key to the stability of the state economy from undue pressure and interference in their work. In addition, this process is able to enrich the judicial practice with precedent interpretations of key economic and legal issues, such as, for example, the limits of application of interim measures.

In the second half of 2020, one of the largest gold mining companies in Russia, Petropavlovsk PLC, became the arena for a corporate dispute between its main shareholders. The claims of Sergey Ermolenko and Alexey Maslovsky, top managers of Pokrovsky Rudnik JSC owned by Petropavlovsk PLC and several other subsidiaries, are being considered by the Arbitration Court of the Amur Region.

The formal reason for the lawsuit was the change in the management of Petropavlovsk PLC in August 2020. After that, experts evaluated all actions of Ermolenko and Maslovsky as attempts to prevent changes in the composition of the management of subsidiaries, whose management, according to the participants in the process, sabotages the decisions of the elected Board of Directors of Petropavlovsk PLC. Presumably, the purpose of such actions is an attempt to prevent the new management of the company from checking the integrity of the activities of predecessors suspected of causing losses to the companies of the group.

It is important to note that although Petropavlovsk PLC can currently be classified as a fairly profitable, stable and promising company in the country, in terms of a number of key performance indicators it lags far behind its competitors in the industry. The company is increasing its gold production and sales, while its production cost is almost twice as high as that of the Polyus gold mining company - $ 800 per ounce against $ 394 per ounce. This, in the opinion of the Board of Directors of the company, may be the result of management mistakes and "dubious transactions", which will be investigated at the initiative of the Board over the previous 3-year period.

On June 25, 2020, the company entered the Moscow Stock Exchange, its shares were rated as the most reliable. In this crisis year, the price of gold grew rapidly (by a third in the first half of the year), and in early August reached a historic peak of $ 2037.05 per ounce, further growth is predicted. With the fall in oil and gas prices, gold mining companies have become particularly important for the Russian economy. In this regard, actions against the management of a key company in the market acquire federal significance.

The most important question is becoming a legal assessment: are the actions of Ermolenko and Maslovsky, who are members of the board of directors of Pokrovsky Rudnik JSC and a number of other Russian subsidiaries, but not their shareholders, unscrupulous. Presumably, they filed deliberately unfounded claims and applications for interim measures, which can be viewed as an attempt to prevent Petropavlovsk PLC from exercising the rights of a shareholder and participant in Russian subsidiaries.

In particular, in court hearings on October 29 and November 5 against LLC Malomyrsky Rudnik, LLC Kapstroy, LLC Temi, LLC Transit and LLC NPGF Regis, and representatives of the companies and a representative of Ermolenko himself, it was confirmed that in these cases lawsuits were filed for challenging non-existent corporate decisions and actions.

In the petition, Ermolenko pointed to a corporate conflict in the group. According to him, the new Board of Directors of the parent company Petropavlovsk PLC will try to illegally replace the board and general director of Pokrovsky Rudnik JSC.

Petropavlovsk PLC and Eponimosco Limited, which are the main shareholders of this company, believe that this is an illegal interference in the economic activities of Pokrovsky Rudnik JSC. Interim measures go beyond the stated dispute and are not proportionate to the potential claims of Ermolenko.

It is important to note that interim measures in the form of a prohibition to amend the constituent documents, which form the basis of Ermolenko's claim, extremely limit the possibilities for the normal operation of the company, which increases the risk of significant losses.

Experts believe that such interim measures restrict the rights of shareholders to exercise corporate rights in relation to their assets and are obviously excessive. Under Russian corporate law, amendments to the company's charter and termination of the powers of members of the Board of Directors are within the competence of the general meeting of shareholders.

In this regard, only a shareholder, in view of his material interest in the efficient operation of the company, has the right to appeal. Neither the members of the board of directors nor the CEO have the ability to influence the voting results. Corporate governance rules are designed to protect shareholders from management, not vice versa.

This fact gives the Petropavlovsk PLC case an extremely important precedent. The court is able to allow the director, in the order of interim measures, to achieve an actual (through the prohibition of registration actions) prohibition of shareholders to hold a general meeting on the issue of their re-election and amendments to the charter. Such a decision threatens to radically affect the corporate practice in our country, the destabilization of which is likely to negatively affect the investment climate.

Ermolenko previously held the position of general director of JSC MC Petropavlovsk, is a member of the Board of Directors of a number of other subsidiaries of the group - LLC Albynsky Rudnik, LLC Malomyrsky Rudnik, but does not own any shares or shares in them. Nevertheless, in early October, the court granted his application for security measures. This decision caused a great surprise among the experts, not only because of the contradiction with the verdict expected by lawyers, but also because of its rarity in general. On average, arbitration courts satisfy only about every five such claims (in 2017, 23% were satisfied, in 2018 - 16%, and in 2019 - less than 20%). This fact forces us to pay special attention to the analysis of the court's act.

On October 13, Petropavlovsk PLC secured a partial lifting of the interim measures against its subsidiaries. Despite approximately the same argumentation of the parties and the situation in the companies, it turned out to be different for the parties to the disputes. In two cases, with the participation of Pokrovsky Rudnik and Malomyrsky Rudnik, Petropavlovsk PLC managed to achieve the cancellation of interim measures, in two other disputes the court decided to keep them.

The following RAPSI material will be devoted to the interpretation of such a controversial court decision by experts.