London-listed specialist flake graphite producer Tirupati Graphite has asked shareholders to vote against resolutions brought by a group of shareholders seeking the removal of chairperson and MD Shishir Poddar, joint-MD Puruvi Poddar and Alastair Bath from office as directors of the company and the appointment of Mark Rollins, Leo Koot, Isabel de Salis and Murat Dogan Erden as directors.
The company, which has operations in Madagascar and Mozambique, in April received a letter from Walpole St Andrews Nominees, on behalf of a group of underlying shareholders holding, in aggregate, about 5.8% of Tirupati's issued ordinary share capital, requesting that a general meeting be held to allow shareholders to vote on the removal of the three directors from the company's board.
In the letter, the shareholders expressed concern about “a series of events and decisions that have undermined shareholder confidence and led to a noticeable decline in the company’s market performance and valuation".
They pointed out that, earlier this year, all of Tirupati’s nonexecutive directors resigned, citing unresolved issues relating to the company's strategic direction, governance practices and overall performance.
“This development coincided with a significant drop in Tirupati’s share price, eroding the market capitalisation to a mere fraction of what was initially invested by many valued shareholders,” they added.
In a May 13 statement to all shareholders and in response to the concerns raised in the letter, Tirupati said it recognised that its current board structure and composition needed to be addressed to ensure the company was able to return to Quoted Companies Alliance compliance.
It noted that the board was taking urgent steps to appoint a new nonexecutive chairperson, nonexecutive directors and a CFO.
Tirupati said the specialist nature of the graphite sector had meant that the company transacted with related parties, achieved on highly competitive terms, which had been instrumental in shaping the company's development.
“The company has successfully grown with minimal cash resources. It is making considerable progress in addressing the working capital situation, which will enable it to successfully expand productivity and profitability,” it stated.
Tirupati said it did not believe the proposed replacement directors had the skills or experience needed to operate in the complex and specialist graphite sector.
The company added that it continued to believe that its pursuit of a downstream integration was critical to shareholder value creation. It was, therefore, taking active steps to keep negotiations with PranaGraf ongoing in the best interests of pursuing its downstream strategy.