AIM-listed Block Energy and an activist shareholder group have become embroiled in a knockdown fight over the future of the company.
Allegations of wrongdoing have flown, with each side accusing the other of failures and acting improperly. The company has gone so far as naming advisory practice Gneiss Energy in its allegations of impropriety.
The shareholders, known as the Block Energy Support Group, have stated their aim to improve transparency over perceived failings and providing an alternative plan for the future.
As a first step in this regard, the group aim to replace Block’s chairman, Philip Dimmock. In his place, they call for the appointment of Charles Valeschini, currently a non-executive director.
GP Jersey, which has around 5% of Block’s shares, posted the requisition. The broader support group controls around 20% of the AIM-listed company’s shares.
Block will hold a general meeting on August 11 to allow shareholders to vote on this proposal.
The support group does not stop there, though. Late in July another note was filed, asking Block to carry out an independent audit of what has happened at the company.
This would examine Block’s disclosures and historic practices. The oil company has failed to respond to reasonable requests for information, the support group said, which had driven them to request the investigation.
Disregard
Block has rejected the requests – and fired back its own criticism, singling certain individuals behind the support group out for criticism. The activist shareholders have tried to get Block to enter into transactions that would not be to the benefit of the oil company, it has said.
GP Jersey’s approach, it continued in a circular on July 30, has a “clear disregard” for Block and shareholder funds.
It goes on to say that the shareholder group is attempting to exert influence on Block, which will lead to “high levels of fees being paid to directors and related parties with no increase in share price for the benefit of other shareholders”.
It further alleges that the shareholder group has carried out an “unreasonable and relentless pursuit of information” about Block, the oil company said, in its “attempts to direct the Board in how it should operate the business”.
Snap back
Block named Gneiss Energy, led by Jon Fitzpatrick, as acting against its interests. Fitzpatrick is a member of the activist shareholder group.
The oil company also flagged up a court case filed by Angus Energy, against Gneiss. Angus has declined to provide details about what the litigation involved.
The activist group rejected the suggestion “in its entirety”, saying that Gneiss has had little involvement with Block since it introduced the company to Schlumberger in August 2019.
The shareholder group also denied it was attempting to takeover Block.
Block only has one non-executive director left, Valeschini. The shareholder group has said he supports its resolutions.
Two other directors resigned in July. To Block, this occurred as a result of the men being unwilling to be drawn into the mud-slinging fight with the support group.
The other side denied this, saying the reasons why the directors quit should be investigated by the probe. Furthermore, it said, Block’s financial PR firm “quit without notice at the same time”.
The support group maintains that the issues could be resolved if correspondence between the two sides was released. “If the company elects not to do so, the shareholders invite it to publicly explain why not,” the statement today said.
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