Petroceltic denies anonymous corruption accusations

23 August 2015

Dissident shareholder renews battle

  • Ireland’s Petroceltic denies corruption allegations from an anonymous blogger
  • An open letter from activist shareholder, Switzerland’s Worldview Capital Management, brought up the accusations
  • Petroceltic is pursuing the blogger via the Irish courts

Dublin-based oil and gas company Petroceltic has been forced to deny accusations of corruption published on an anonymous blog.

Activist shareholder, Swiss-based Worldview Capital Management referenced the “alleged fraud and corruption which may have taken place in the management of Petroceltic’s Algerian project” in an open letter to the Petroceltic board, saying it was “disappointed to again raise issues that, if substantiated, further evidence a culture of inappropriate and failed governance”.

Petroceltic tendered the main engineering, procurement and construction contract for the $2bn Ain Tsila gas and condensate development in Algeria on 19 August. Four companies prequalifed to bid.

The US’ Chicago Bridge & Iron (CBI) has carried out front-end engineering and design (FEED) work.

The Irish High Court ruled the blog, titled “Petroceltic: exposure and truth” was defamatory on 20 August and had it taken down.

“The company has commenced an action in the Irish Courts to ascertain the identity of the blogger,” reads a Petroceltic press statement. “Once identified, he/she will be invited to demonstrate any bona fide evidence to support the allegations made. If no such evidence is forthcoming, the Company will take appropriate legal action against any party who has made or repeats such defamatory statements in order to protect the good name and reputation of Petroceltic, its staff and consultants.”

It has started an investigation into the allegations, while maintaining that they are baseless. Petroceltic’s share price has fallen by 15.7 per cent, to €0.455, since Worldview published its open letter.

Worldview, which owns almost 29 per cent of Petroceltic’s shares, has forced an emergency general meeting on 7 September to discuss amendments to the company’s articles. The changes would prevent the Petroceltic board from disposing of material assets worth more than 25 per cent of the company’s revenues, assets or reserves.

This would effectively end Petroceltic’s delayed plans to issue $175m of secured bonds to finance the development of Ain Tsila.

Petroceltic views the proposed changes as illegal under Irish law, a waste of shareholders’ and the company’s time, and part of a Worldview plot to take control of the board.

Worldview can also use its voting rights to prevent Petroceltic from issuing more equity.

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