Gulf Keystone has hit back at criticisms from a major shareholder over the weekend following the appointment of Simon Murray as chairman.
The former French Legionnaire and explorer was appointed non-executive chairman by the oil exploration firm last week ahead of their impending stock market listing.
But M&G Recovery Fund, which owns 5.1% of Gulf Keystone, said they wanted to “improve corporate governance at GKP by effecting the appointment of independent directors to its board”, and has put forward its own candidates to join the company.
“The fund also expects a strengthened board to review the current level of directors’ remuneration, which we consider excessive – for example, we note the payment to the chief executive of $13.6m, plus $9.1m deferred cash, in respect of 2012 when the company $80m.”
Gulf Keystone, which is listing on the London Stock Exchange later this year, responded to the criticisms in a statement this morning.
“A Non-Executive Director of Gulf Keystone met with M&G on 12 June 2013 to discuss corporate governance, seven days before M&G issued their resolution nominating four proposed candidates for election as Independent Non-Executive Directors,” the company said.
“At no time during the meeting did M&G raise the intention of sponsoring their own nominees. Indeed, Lord Guthrie had arranged, on request by M&G, to meet with Jeremy Asher, one of their proposed nominees and a former director of Gulf Keystone who was voted off the Board on 1 April 2010.
“This meeting was scheduled to take place, as it turned out, two hours after the submission by M&G of their nomination of the four candidates. At no time prior to this meeting was the nomination of the four candidates mentioned either by M&G or Jeremy Asher. Lord Guthrie was left with no choice but to cancel the pre-arranged meeting due to the behaviour of M&G.
“Gulf Keystone remains surprised that M&G chose unilaterally to nominate the four candidates, given that the Company was running a previously announced, properly constituted, independent search process, led by the Chair of the Nominations Committee, Lord Guthrie and assisted by Odgers Berndtson.
“It is wholly disingenuous for M&G to state they are ‘seeking a meeting with new Chairman Simon Murray as soon as possible’. Advisers to Gulf Keystone contacted M&G on 5 July 2013 by phone to arrange such a meeting, to which M&G agreed in principle. A follow up email to finalise the details of the meeting has yet to receive a reply.
“Gulf Keystone notes that M&G wishes to improve corporate governance at Gulf Keystone. The Company, in preparation for its move to the Main Market, has already announced its intention to bolster the Board with appropriately experienced FTSE250/100 company (or equivalent) independent non-executive directors, of which Simon Murray’s appointment represents the first step.
“Furthermore, as announced on 4 July 2013, Simon Murray will be appointed Chairman of the Remuneration Committee.”
Reports in the weekend press suggested Capital Group, another shareholder in Gulf Keystone, had also expressed concerns over the pay and governance at the company.
The war of words between M&G and Gulf Keystone has increased the focus on the forthcoming annual meeting of the firm on July 25, when shareholders will be able to vote on the new appointments.
Last month the oil firm was given approval to start production on the Shaikan field, in the Kurdistan region of Iraq, which is expected to produce up to 40,000 barrels per day.