20th Aug 2015 07:15
LONDON (Alliance News) - Petroceltic International PLC's largest shareholder stepped up its long running debate with the company on Thursday after publishing an open letter alleging the company has committed "fraud and corruption".
Petroceltic shares were down 5.1% to 51.25 pence per share on Thursday morning.
Worldview Capital Management has a 29% stake in the oil company and the pair have been exchanging words since back in 2014. Worldview has previously had concerns over the management at the company and its finances.
However, on Thursday, Worldview released an open letter to Petroceltic which claimed Petroceltic's Project Director Geoff Stevenson, who is in charge of the company's Ain Tsila gas field development in Algeria, "as well as members of his family" have committed "fraud and corruption".
"We write to seek clarification for shareholders in respect of certain allegations which have recently appeared in the public domain relating to alleged fraud and corruption which may have taken place in the management of Petroceltic?s Algerian project," it said.
Worldview said it has filed the letter following on from "public allegations", which allege Stevenson may have benefited from "a scheme designed to "defraud the company" by hiring contractors through a company called Petroplan using "overstated invoices". The letter also alleges Petroceltic awarded the front end engineering and design contract for the project to Petroplan "on a questionable basis".
Worldview also said that Stevenson is not thought to be the project director any longer.
"If correct, these public allegations suggest that shareholder value may have been compromised by the overpayment for services and/or funds being fraudulently diverted away from Petroceltic and thus its shareholders," said Worldview.
Worldview has submitted a list of questions to Petroceltic to try and gather some clarity over the situation, including what the company has done to investigate the allegations, if Stevenson is still in charge of the project, whether Petroceltic is aware of any "wrongdoing" and what the rationale was for using Petroplan for the project.
"As the largest shareholder in Petroceltic, and following our sustained and constant efforts over the last 14 months to proactively engage with the Board to improve Petroceltic's governance, we are disappointed to again raise issues that, if substantiated, further evidence a culture of inappropriate and failed governance," said Worldview.
The open letter and allegations come ahead of an extraordinary general meeting due to be held on September 7 for shareholders to vote on a separate issue raised by Worldview, which wants shareholders to vote in favour of its proposals to restrict future asset disposals, something Petroceltic has disagreed with.
Worldview has tabled a resolution that proposes Petroceltic should seek approval from shareholders for any material asset disposals which represent 25% or more of the company's revenues, profits, or oil and gas reserves after claiming Petroceltic had "run out of money".
Petroceltic is currently proposing placing the Ain Tsila gas field as security for a bond issue, which has also ruffled Worldview's feathers. Worldview has called the proposed bond deal "perilous to shareholders".
Petroceltic has said Worldview is proposing the resolution and fighting its bond plans as part of an "ongoing strategy" to gain control over the board. It argues that the company is already subject to rules on the disposal of assets, and the proposed resolution is contrary to the applicable standards set out in these rules.
By Joshua Warner; [email protected]; @JoshAlliance
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