North Sound Motion Delivers Coup de Grace to Afplats ChairmanBy...

North Sound Motion Delivers Coup de Grace to Afplats Chairman

By Bill McIntosh (31st July 2006)

LONDON (HedgeWorld.com)—North Sound Capital, a Greenwich-based hedge fund, has led a shareholders' revolt delivering the coup de grace to the non-executive chairman of African Platinum (Afplats), a small-cap mining exploration company listed on the Alternative Investment Market.

At an extraordinary shareholders meeting Tuesday [July 25], shareholders voted to oust Charles Hansard by a 53 percent to 47 percent margin in spite of his having the unanimous backing of the company's board of directors. Subsequently, Independent Non-executive Director Dr. Mark Bristow announced he will quit effective Aug. 4 ‘as he does not agree with this removal and is resigning in principle.’ Brian Morris, an experienced mining company executive, has been appointed interim chairman.

North Sound threw down the gauntlet in a petition for the meeting launched on July 11. Since the hedge fund operator had 10.1 percent of the stock it was able to force Afplats' board to call the meeting to consult shareholders.

Among the backers of Mr. Hansard and the existing board was minorityshareholder Thomas S. Kaplan, a Geneva-based investor. Indeed, such was Mr. Kaplan's support that he spent in excess of $200,000 buying full-page advertisements in July 25 editions of the Financial Times and the Wall Street Journal to publish a 5,000-plus word panegyric entitled ‘Setting the Record Straight’

In its July 11 motion statement sent to shareholders, North Sound argued Mr. Hansard was getting paid too much, lacked "proven industry experience," and that the company's share price performance had been unacceptable. "Since the Company's last equity financing in September 2004, the Company's share price has significantly underperformed the share price of directly comparable companies," North Sound said. ‘Of the comparable platinum companies,’ according to a statement on its web site ‘only the Company's share price has underperformed the price of platinum.’ The share price of Afplats closed up 0.25 pence at 30.5p on July 25 just 0.5p above the 2004 financing.
In his newspaper advertisements, Mr. Kaplan said he had offered to double his own position in Afplats by purchasing North Sound's stake of 44 million shares. "As gestures go, $25 million or so is not insignificant. I can't think of a better place to invest my money that Afplats nor a better man to steward that investment than Charles Hansard."

North Sound wouldn't comment on Mr. Kaplan's remarks or his campaign. It is now seeking to move beyond the row and influence the appointment of a new chairman. "We have a couple of people in mind who meet the criteria," said Andrew David, the firm's managing director. ‘We will give their names to the board. The board will deliberate and bring names back to shareholders.’