* Peter Hambro stepping down as chairman, staying on the
* ISS says lack of detail to back up governance allegations
* Petropavlovsk returned to profit in 2016
(Updates with Glass Lewis recommendation)
By Carolyn Cohn and Barbara Lewis
LONDON, June 12 Investors in London-listed gold
miner Petropavlovsk should reject a plan to overhaul the
board at the company's annual general meeting next week, leading
shareholder voting advisors said.
Three top shareholders, who together own more than 30
percent of Petropavlovsk, have put forward resolutions aimed at
replacing Chairman Peter Hambro, who set up the Russian-focused
miner in 1994.
Citing corporate governance failures, the rebel shareholders
are also seeking to replace three non-executive directors with
Shareholder advisor ISS said in a report seen by Reuters
that "in the absence of detail that would lend weight to the
requisitionists' claim of inadequate corporate governance
controls, support for the shareholder nominees is not warranted
at this time".
Another advisor Glass Lewis shared its view.
"In our view, the dissidents' arguments lack the substantive
detail and refinement that we would expect from a campaign
seeking to replace a majority of the board," it said in a
Both ISS and Glass Lewis advise investors on which way to
vote at AGMs.
Hambro has accused the rebel shareholders of pursuing "a
takeover by stealth" led by Russian billionaire Viktor
Petropavlovsk returned to profitability in 2016 after
restructuring to tackle its debts.
The resolutions put forward by the three shareholders -
Veselberg's conglomerate Renova along with M&G and Sothic - seek
to replace four of six board members, including Hambro, who has
said he will step down as chairman, but stay on the board as an
The ISS report included a statement from Renova saying "the
current board lacks the requisite focus on corporate governance
and does not endorse the principle of good governance that
should be followed by a public company".
A separate statement in the ISS report from M&G and Sothic
referred to "multiple strategic mistakes made by Petropavlovsk
over the course of 2014, 2015 and 2016, which have significantly
destabilised the business and delayed its recovery".
Petropavlovsk announced last month that Andrew Vickerman
would become interim non-executive chairman after the June 22
AGM and has appointed recruitment specialists to find a
permanent replacement for Hambro.
Petropavlovsk's share price has recovered to around 8 pence
from a low of around 5 pence in early 2016.
(Additional reporting by Simon Jessop; Editing by Susan Fenton)