Thought the fight for control of Baja’s board couldn’t get uglier? Read on

This is gonna hurt

Mount Kellett Capital Management on Friday accused 20%-owned Baja Mining (Mount Kellett owns 19.9% of Baja) of filing a “baseless,” “tactically motivated” and “unfounded” complaint with the British Columbia Securities Commission the day before.

“This filing is entirely without merit and is nothing more than a transparent attempt by Baja to use frivolous legal proceedings to distract Baja shareholders from the real issue at hand: the self-dealing and web of conflicts of the management and board of Baja,” Mount Kellett said in a statement released Friday.

Baja Mining is fighting attempts by Mount Kellett, a $6 billion asset manager, to stack the miner’s board with its own nominees and expand the number of independent directors.

Yesterday’s complaint by Baja centred on Mount Kellett’s “failure to file early warning and insider trading reports” in 2011 after it bought in excess of 10% of Baja’s shares. Baja accuses Mount Kellett of choosing “a less transparent form of disclosure as part of a stealth strategy to acquire control of Baja without paying a premium to all shareholders.”

The whole issue came to the fore in January after a letter sent by Mount Kellett that tells of “a prevailing culture of nepotism” and “a lack of independence in critical decision making” at Baja.

Reports at the time suggested the accusation of nepotism is related to Baja CEO John Greenslade’s daughter, who works as the corporate secretary of Baja.

A special shareholders’ meeting is set for April 3 to vote on the new board composition.

Baja, worth $320 million on the TSX, is building a 70%-owned copper-cobalt mine in Mexico for $890 million which should start production early next year.

Baja was up a penny at 95c in Toronto on Friday and the stock has advanced 18% so far this year.

Stock discussion boards have been buzzing about the whole saga, taking sides and fighting battles on behalf of both sides for months now.

 

Below is an interview with John Greenslade on Face the Analyst by Investment Pitch, but the issue of Mount Kellett is not broached.

Image by Patrick Tuohy / Shutterstock.com

 

An earlier version of this post incorrectly stated that John Greenslade’s daughter Denby Greenslade works as corporate secretary for Baja Mining. Kendra Low (nee Greenslade) is Baja’s secretary. Denby Greenslade is the corporate secretary and interim CFO of Catalyst Coppper, a separate company also headed by John Greenslade. MINING.com regrets the error.

4 Comments