Taseko's court action aimed at fending off a takeover of the company’s board of directors
A nasty proxy war between Taseko Mines Ltd. (TSX:TKO, NYSE:MKT) and a group of American investors is brewing on both sides of the border.
Taseko, which is publicly listed in Canada and the U.S., has filed a court action in the U.S. aimed at fending off a takeover of the company’s board of directors by a group of shareholders known collectively as Raging River Capital LP. Collectively, they own a 5.14% equity stake in Taseko and 7.75% in bond debt.
In action filed in U.S. District Court, Taseko alleges Raging River breached Securities and Exchange Commission (SEC) regulations by failing to disclose salient facts, including failing to disclose that Raging River holds US$16 million worth of senior notes.
Meanwhile, Raging River says it plans to ask the BC Securities Commission (BCSC) to investigate two Taseko executives for insider trading.
In a press release, Raging River blames Taseko’s current management and board of directors for plummeting share values and inability to move forward with its New Prosperity mine project.
It characterizes the company as overly litigious, citing a defamation suit it launched (and lost) against the Wilderness Committee and its suit against the federal government over its rejection of the New Prosperity mine.
It blames Taseko management for its failure to move the New Prosperity mine forward “because of the complete inability of the present management and board to find a working relationship with the First Nations and the regulators.”
According to Taseko, Raging River did not properly disclose to the SEC that it owns US$16 million worth of secured notes.
"As a beneficial owner of Taseko's notes, the interests of the Raging River defendants are very different from those of Taseko's shareholders," Taseko's complaint states.
Taseko owns the Gibralter copper-molybedenum mine in the Cariboo mining district. Its plans to build the Prosperity and New Prosperity mine have been rejected twice by the Canadian Environmental Assessment Agency.
Read article at Business In Vancouver