Petropavlovsk investor Everest demands independent inquiry

Everest Alliance, which owns about 5% of Petropavlovsk, wants one of the big four accountancy firms to carry out a forensic examination of transactions and arrangements over the past three years between the FTSE 250 company and current and former directors and senior managers.

The investigation should also examine transactions concerning IRC Ltd, which owns the Kimkano-Sutarsky mine in eastern Russia. Petropavlovsk owns 31% of IRC.

Everest said the investigation should cover direct and indirect connections and the companies' affiliates and subsidiaries. It wants the inquiry authorised in a special resolution to a general meeting of Petropavlovsk' shareholders. The company's board said it intended to call a meeting without delay.

"The purpose of the forensic investigation is to determine if each such transaction or arrangement was carried out in the best interests of the company and to the benefit of its shareholders or otherwise," the resolution text said. "The independent forensic investigator shall provide a written report detailing its findings. The board shall promptly make available to the shareholders an unredacted copy of the forensic investigator's report."

Everest, along with Prosperity Capital Management, is the main force behind efforts to overturn a boardroom coup that installed five directors favoured by Petropavlovsk's biggest shareholder, UGC. On 30 June the board accused UGC of acting in concert with other investors to oust executive and non-executive directors, including Chief Executive Pavel Maslovskiy.

The board said UGC, run by Russian billionaire, and other shareholders took effective control of the company by indicating support for the existing board and then voting in their own nominees, taking independent shareholders by surprise.

Also on Wednesday Petropavlovsk said four "temporary directors", backed by UGC, would remain on the board under a court order. The order requires the board to give Everest five days' notice before appointing new directors, entering into certain contracts or issuing new shares.

Board resolutions, including calling a general meeting, require the approval of at least two of the directors re-elected at the annual general meeting on 30 June. They are Maxim Kharin, James Cameron, Katia Ray and Charlotte Philipps.

Petropavlovsk said: "It is the board's intention that, having received requisitions from both Prosperity Capital Management and Everest, a [general meeting] is called without delay, affording all shareholders the opportunity to cast their respective votes in full knowledge of the relevant facts. A notice convening the GM will be sent to shareholders in due course."