Group 42 takes Vaalco Energy (NYSE: EGY) to task. Owning 6.8%, the fund says EGY has abysmal corporate governance, bloated G&A expenses, poor capital allocation, rampant capital expenditures and renewal of a CEO contract after the CEO destroyed shareholder capital.
Group 42 says of the corporate governance,
“Immediately after we disclosed the Group’s 11% ownership stake, the Board rushed to adopt a poison pill with a 10% ownership trigger, thereby blocking the Group from acquiring additional shares and purporting to restrict us from communicating with our fellow shareholders regarding the best means to increase the value of our investment in the Company. Given that in 2009 VAALCO’s shareholders overwhelmingly voted against the adoption of a poison pill, last week’s action by the Board is a blatant disregard of shareholders’ views on this topic. In a difficult business environment, your decision to spend precious corporate resources to entrench yourselves from the actual owners of the business will only serve to perpetuate the Company’s poor performance without accountability.”
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