Shareholders in Central and Eastern European distiller and alcohol distributor Stock Spirits Group (SSG) on May 23 elected two non-executive directors nominated by a minority shareholder apprently intent on taking control of the company.
Alberto Da Ponte and Randy Pankevicz were put forward by Western Gate Private Investments, the vehicle of Portuguese businessman Luis Amaral, which has been fighting the incumbent management at Stock Spirits since buying into the company late last year. The approval at the company's AGM suggests Amaral - who controls SSG's biggest customer, Polish wholesaler Eurocash - has significant support from other shareholders.
For its part, SSG hopes to keep the new board members at arm’s length. The management board has determined “they are not independent of Western Gate,” the company said in a statement.
The board of the London- and Prague-listed company warned investors on April 19 that Amaral’s efforts to install board members would grant him “undue influence” and represented an “overriding conflict of interest”. That came a day after SSG sacrificed its CEO as it sought to fend off accusations from Amaral that it has failed to deal with a sharp decline in results due to falling market share in Poland, the company's biggest market.
In a statement following the AGM, Stock Spirits said the board will proceed with plans announced on May 17 to “identify and appoint two additional independent non-executive directors who are suitably qualified and will complement the experience of existing Board members”.
In other words, SSG wants to dilute the influence of Da Ponte and Pankevicz. The company added that Armal’s men could be asked to leave board meetings if commercially sensitive information were being discussed due to the "conflict of interest".
Amaral has been speculated to be hoping to take control of Stock Spirits via Western Gate since becoming the largest shareholder with the purchase of a 9.7% stake in November, when the share price buckled as the company cut its profit forecast. The battle is now on for support from other shareholders, featuring several London-based fund managers with under 10%.
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