The Australian reported that Macquarie Bank is standing firm on its bid to overhaul the board of coal junior Coalworks, raising renewed concerns about the salaries of key management and the lack of detail on a deal with Hong Kong's Noble Group.
The investment bank has written to shareholders to provide further detail on its reasons for calling a general meeting for June 15th 2012 to remove non executive chairman Mr Wayne Mitchell and MD Mr Andrew Firek and replace them with two directors proposed by Macquarie.
The key concerns centre on Coalworks' recent deal with Noble Group. This included a share placement and the appointment of the Hong Kong trading group as a strategic adviser, and the junior's remuneration package.
Macquarie executive director Mr Gavin Bradley said that Mr Firek has advised the bank that although more than one adviser was considered for selection as a strategic adviser, no competitive tender process was conducted before the appointment of Noble Group.
The call to sack the top executives follows a similar move last year when Macquarie, along with two other significant shareholders, voted against four of the five resolutions at Coalworks' annual meeting on November 11th 2011, which led to the ousting of two directors.
Macquarie outlined in its letter to shareholders last week that one of the resolutions it voted against at the AGM was the remuneration report, because of concerns about the rapid increase in salaries.
Mr Bradley said that "Total remuneration paid to key management personnel of Coalworks during the year ended June 30th 2011, more than tripled compared to the previous financial year from USD 829,972 to USD 3,083,420."
The junior coal company has said that last year's remuneration included one off bonuses for the completion of a JV deal with Japan's Itochu on its Vickery South project and a deal with Boardwalk Resources on the Ferndale asset.
Coalworks is also fighting against a USD 142 million takeover bid by Whitehaven Coal, which earned an interest in Coalworks through its takeover of Nathan Tinkler's Aston Resources and Boardwalk Resources.
Coalworks has argued that Macquarie's move to oust the chairman and managing director is opportunistic because the bank intends to make it easier for Whitehaven to gain control of Coalworks.
But Macquarie has said that when it requisitioned the general meeting to sack the men it was not aware of Whitehaven's intentions.
Coalworks has reiterated that it firmly believes that replacing Mr Mitchell and Mr Firek with Macquarie's nominees would put the company in a much weaker position to respond to offers and weaken the board's ability to maximize value for shareholders.
Source - The Australian
(www.steelguru.com)
