Peter Hambro was unimpressed by the blindly dogmatic nature of nearly one-fifth of his own company's shareholders: "I think it's purely a doctrinaire vote."
These were the investors who in June voted against the Eton-educated sexagenarian's re-election as chairman at Petropavlovsk, the gold group he founded in 1994 as the rather less immodest Peter Hambro Mining. They felt that for a chairman he had too much dominance over a company which had, to that point, seen nearly 70 per cent wiped off its share price in a year.
"My role as chairman is more executive than it would be if the geographic set-up of the business was different," he argued.
This refers to the fact that chief executive Sergei Ermolenko is based in Russia, where Petroavlovsk is one of the biggest precious metals producers, while he runs operations in London.
However, Mr Hambro would be wrong to assume it's just the shareholders who have doubts about Petropavlovsk. A good chunk of the market is betting against the group's fortunes, with 14.7 per cent of its shares being shorted – an 870 per cent rise since the start of the year.
Short selling happens when a hedge fund or large investment bank takes the view that shares in a particular company are set for a fall. The investor then borrows the shares from someone who owns them – such as a large pension fund or insurance company – and sells them in the market.
Once the shares have fallen in value, the investor buys them back at the lower price and returns them to the lender having pocketed a pretty penny.
Petropavlovsk is, by some distance, the most shorted stock on the stock exchange.
As Mr Hambro sits with Russian friends sipping vodka, he must be wondering why his country- men in London are so against a company that has achieved 10 consecutive years of increased gold production.
The main reason is the gold price, which collapsed from $1,900 (£1,215) per ounce two years ago to barely $1,200 last month before a recent rally. Gold, so often the safe haven of global downturn, was perceived as a bubble waiting to burst, particularly as cracks emerged in the economy of commodities-hungry China.
A City source says: "As well as the gold price, Petropavlovsk has £1.1bn of debt on its balance sheet and there has been speculation about how this might be financed. Although a lot of the shares are out on loan it doesn't necessarily mean hedge funds will make a profit, though, as there is value in the company."
That could prove to be correct, given recent analysis that there is now possibly a physical shortage of gold.
In a note published on Friday, Peel Hunt analysts said: "Current developments are historically unprecedented and should bode well for gold prices and gold miners."
A day earlier, the World Gold Council noted that "recent falls in the gold price have generated significant increases in demand" in recent months which should lead to a continued revival.
Ian Cockerill, the chairman at Liberian gold group Hummingbird Resources said last week that "the doomsayers talking gold back to below $800 per ounce are in cloud cuckoo land".
Maybe it's best, then, to not bet against a man whose own doctrinal faith in gold could again pay off.Reuse content