Business Day reported last week that shareholders might vote against the re-election of non-executive directors and the remuneration policy at the company’s annual general meeting on Wednesday in Guernsey, Channel Islands.
Shareholders felt that Frandsen and Pallinghurst founder and chairperson Brian Gilbertson were overpaid and lived high, thanks to generous management fees, while they watched the company’s share price dwindle.
Gilbertson, a former chief executive at global diversified mining giant BHP Billiton, has been blasted by a minority of shareholders who spoke on condition of anonymity for Pallinghurst share price demise to R2.92 from R10 a share at its listing in 2007 at the height of the resource boom.
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“Many people backed Pallinghurst, which listed at R10 a share. It is sad to see that the share price has lost value so drastically. Gilbertson’s credibility is being questioned,” one shareholder said.
The shareholder also said non-executive directors had enriched themselves at the expense of minority shareholders.
“In ten years we have earned nothing as shareholders and that is unacceptable,” he said.
Other analysts said that that shareholders were frustrated because the non-executive directors did not communicate.
“Most companies have investor presentations at least once a year and many twice a year, but they kept themselves far away from shareholders.
“A major management shake up is needed. The business is being run from offshore, which is a problem, but the mines are in Zambia, Mozambique and South Africa”.
“You cannot run a business from far afield, you have got to be accessible to the operations,” he said.
Pallinghurst has a R5 billion net asset value and it is invested in the platinum group metals, manganese and gemstones.
Pallinghurst holds a 18.4 percent stake in Jupiter, which in turn has a 49.9 percent stake in leading manganese producer Tshipi é Ntle, an open pit mine in the Kalahari manganese fields in the Northern Cape .
Jupiter distributed $55million (R735.45m) to its shareholders in March, of which Pallinghurst received $10m.
“We as shareholders have received nothing from the $10m so far. Pallinghurst is sitting on the cash,” the disgruntled shareholder said.
Pallinghurst also launched a bid to acquire Gemfields, the world’s leading supplier of responsibly sourced coloured gemstones such as rubies.
Peter Major, Director Mining at Cadiz Corporate Solutions, said that Pallinghurst had also been blamed for the negative impact on its Sedibelo platinum mining project in the Pilanesberg nature reserve.
He believed the shareholder revolt was long overdue.
“These directors should have been turfed out a long time ago.
“Especially with what they did in the Pilanesberg.
“That Sedibelo massive open pit cash sucker monstrosity never should have gotten the go-ahead!
“It destroyed a lovely part of the country forever,” Major said.
Pallinghurst’s largest shareholders include Christo Wiese, with 19.6 percent, followed by Old Mutual Investment Group with 9.46 percent and Oasis Asset Management with 9.04 percent.
Oasis Crescent Capital owns another 6.22 percent.
BUSINESS REPORT ONLINE