By Alistair MacDonald and Ben Dummett
TORONTO--One of Barrick Gold Corp.'s largest investors has
written to the mining giant expressing "concern" over the surprise
resignation of two directors and calling for Anthony Munk, a
director and the son of departing chairman Peter Munk, to step
down.
The letter, from London-based investment fund Oldfield Partners
LLP, comes as a number of other funds tell Barrick of their
continued disquiet over corporate governance at the world's largest
gold miner, a drama the Canadian company tried to put behind it
when it announced a series of board changes in December.
Some of Canada's biggest pension funds are set to meet in
February with incoming Chairman John Thornton to discuss their
concerns over the December departure of directors Robert Franklin
and Donald Carty, among other matters, people familiar with the
matter said.
The two men resigned in protest over what they believed was the
influence of Peter Munk on the hiring of new directors and amid
concern that the 86-year-old departing co-chairman would continue
to exert influence on the company he founded even after he steps
down in the spring, according to people familiar with the
matter.
"Mr. Munk has announced that he will be stepping down...any
suggestion that he will exercise outsize influence after that are
unfounded," a spokesman for Barrick said.
In the letter, Oldfield Partners said it shares "the concern of
some other investors" about the resignations of Mr. Carty and Mr.
Franklin. According to a copy of the letter reviewed by The Wall
Street Journal, Oldfield Partners said it was "pleased" by the
proposed board changes and acknowledged Barrick's increased focus
on shareholder returns.
"To that end we feel that retirement from the board after very
long service of Anthony Munk at the same time as his father would
be helpful demonstration of commitment (to shareholder returns) by
the new leadership," according to the letter, which was signed by
the fund's chief executive and founder, Richard Oldfield.
Oldfield, which manages around $6.1 billion in assets, owned
around 9.6 million Barrick shares in September 2013, ranking it the
miner's 14th-largest shareholder, according to FactSet.
Anthony Munk, who didn't immediately return calls seeking
comment, is a successful businessman in his own right and a senior
managing director of Onex Corp., a Canadian buyout firm that
oversees about $16 billion in assets.
At least one other Barrick shareholder has called for Mr. Munk
to step down.
"I think just having the Munk presence there is going to weigh
on the board and people are not going to think that Peter is very
far away as long as Anthony remains," said Michael Sprung, founder
of Toronto-based Sprung Investment Management.
Other fund managers are more focused on asking Barrick to
explain why Mr. Carty and Mr. Franklin stepped down. They complain
that the company was silent when the departures happened.
"I believe that it is in the board's best interest to be
transparent as to why these two directors resigned, and communicate
how they are resolving the issues which led to the resignations,"
Catherine Jackson, a corporate-governance adviser at Dutch pension
ass PGGM Vermogensbeheer B.V., said in an email in late
December.
In the summer, PGGM led a group of mainly European fund managers
pressing for a boardroom shake-up at Barrick.
In February, Mr. Thornton and a number of directors will meet
with a group of Canada's largest pension funds, which have asked
Barrick to explain the resignations and outline the company's
strategy under its new chairman, according to people familiar with
the matter. The funds also want to know the reasoning behind some
of the choices of new directors, according to one of these
people.
"Shareholder engagement is important to us and we will be
meeting with a number of investors in the coming weeks to provide a
detailed update on our progress, in addition to addressing any
outstanding questions they may have," the Barrick spokesman
said.
Still, some investors say they were pleased with the changes in
December and have no complaints about Anthony Munk.
"I don't have an issue with (Mr. Munk) continuing to serve on
the board; there's nothing to indicate that he wouldn't operate in
the best interests of the company," said Don Reed, manager of
Templeton International Stock Fund, which has a small stake in the
mining company.
Write to Alistair MacDonald at alistair.macdonald@wsj.com and
Ben Dummett at ben.dummett@wsj.com
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