By Melodie Warner
Investment firm Mount Kellett Capital Management LP has called
for the suspension of SandRidge Energy Inc. (SD) Chief Executive
Tom Ward and an investigation of allegations he and his son
benefited from mineral rights sold to the oil and gas producer.
SandRidge has come under increased pressure from certain
shareholders to shake up its board, to replace Mr. Ward and to
explore a possible sale of the company.
Last month, TPG-Axon Capital Management LP filed
consent-solicitation documents with the U.S. Securities and
Exchange Commission seeking shareholder approval to change the
energy company's bylaws and replace its entire board of directors,
including Mr. Ward. The fund, which owns about 6.7% of SandRidge's
outstanding shares, also said SandRidge's management has made
"major strategic missteps" and spent too much money unwisely.
SandRidge has said TPG-Axon's plan would be costly and
detrimental to other investors. The oil-and-gas producer also urged
its shareholders to reject the proposal and described the hedge
fund as part of a group of "dissident opportunistic stockholders
with short-term interests."
Mount Kellett, run by former Goldman Sachs Group Inc. (GS)
executives, owns about 4.5% of SandRidge's shares.
The firm said Thursday that TPG-Axon has alleged Mr. Ward and a
trust purportedly run by his son engaged in "persistent front
running of the company."
Mount Kellett said it expected the company and Mr. Ward to issue
a denial of the allegations, but there has only been the assertion
that Mr. Ward had no involvement in the trust.
Mount Kellet said it wants the board to conduct an independent
investigation of the allegations, during which Mr. Ward should be
suspended from serving as chairman and CEO.
A SandRidge representative wasn't immediately available for
comment.
SandRidge shares were recently trading three cents higher at
$6.82.
Write to Melodie Warner at melodie.warner@dowjones.com
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