Turquoise Hill Resources Ltd.'s largest minority shareholder, Pentwater Capital Management LP, filed a proxy circular and issued a letter to the copper-gold miner ahead of its May 12 annual meeting.
The investor asked for shareholder support for the passage of resolutions seeking the election of Pentwater CEO Matthew Halbower as an independent director nominee, and the adoption of a shareholder proposal that would allow Turquoise Hill's minority shareholders to nominate and elect three of the seven directors on the miner's board, according to an April 2 news release.
The private investment firm, which holds about 9.09% in Turquoise Hill with its affiliates and associates, claimed that shareholders have suffered "massive value destruction at the hands of Rio Tinto."
Rio Tinto has a majority 51% interest in Turquoise Hill and operates the company's Oyu Tolgoi copper-gold mine joint venture in Mongolia, where an underground expansion has slowed due to measures by authorities to contain the spread of the new coronavirus.
Pentwater claimed that Rio Tinto and its officers and directors for Turquoise Hill have mismanaged the miner since taking control in 2012, resulting in "a lack of corporate governance controls, systemic disregard for the interests of minority shareholders, a sustained period of false and misleading disclosures, and irreparable harm to the interests of all Turquoise Hill stakeholders."
In March, former Rio Tinto employee Richard Bowley aired concerns to authorities that the company had been aware of cost and schedule blowouts for an expansion at Oyu Tolgoi months before they were disclosed to markets.
Responding to Pentwater's allegations, Turquoise Hill said in an April 6 news release that "it has the right team in place to lead the company in relation to the financing, construction and operation of the Oyu Tolgoi underground expansion and operation of the open pit."
Turquoise Hill reiterated its view, outlined in a March 20 proxy circular, that shareholders should vote against Pentwater's proposal to give minority shareholders exclusive rights to nominate and elect three directors and withhold their vote on the proposal to elect Halbower as a board nominee.