TPG-Axon Capital Management, one of the shareholders of SandRidge Energy Inc. (NYSE:SD), presented facts to its fellow shareholders to support its allegations against the company’s CEO, Tom Ward, regarding related-party land transactions, which are damaging to the interests as shareholders.
According to TPG-Axon, the allegations against Ward are based on publicly available facts, actions taken by the company and financial results, as well as the performance of the SandRidge Energy’s stock.
Last December, TPG-Axon alleged that Tom Ward and his son, Trent Ward, inappropriately acquired mineral rights from third parties and leased those rights to SandRidge Energy Inc. (NYSE:SD) for profit. The investment management firm claimed that Ward and his son actively competed with the company.
In its presentation to fellow shareholders, TPG-Axon provided several facts to prove that entities affiliated with Tom Ward’s Family, including TLW Land & Cattle, WCT Resources, and 192 Investments have been active competitors in the acquisition and sale of mineral rights, which is the primary business of SandRidge Energy Inc. (NYSE:SD), particularly in the Mississippian Lime formation.
The investment management firm also cited that the affiliated entities were “flipping” the rights to SandRidge just weeks or months later. For example, TPG-Axon found that WCT Resources leased mineral rights from Berry family in Pawnee County, Oklahoma on November 30, 2010. WCT Resources flipped the leases to SandRidge two months later, on January 20, 2011.
According to TPG-Axon, the most worrying part is the fact that the “affiliated entities have acquired acreage in advance of purchases by SandRidge in the same areas, and then either sold it to third parties or kept it.”
TPG-Axon requested the board of directors of the company to investigate Ward and his related-party land transactions, and demanded the board to provide shareholders with detailed information regarding the nature of transaction between the entities connected with the Ward family and SandRidge.
The investment management firm strongly believed that the interests of shareholders may have been disadvantaged by Ward’s actions in connection with the related-party land transactions, and the company failed to disclose the nature of the transactions to shareholders.
TPG-Axon also believed that Ward should be terminated if he failed to disclose the full details of the transactions to the company.