Minerva called an emergency shareholder meeting yesterday as it tried to stave off efforts by its biggest investor to oust the chief executive and chairman. It said the challenge was a smokescreen concealing an attempt to gain control of the property group.
The company declared itself confident that KiFin, controlled by the billionaire South African investor Nathan Kirsh, would not secure the backing of other investors it needs before the meeting is held on 8 September.
KiFin is disgruntled about the management of Minerva's assets and claims that the company has failed to answer "rudimentary questions about [its] financing and strategy".
KiFin, which holds 29.5 per cent of the company and is its biggest shareholder, also says Minerva pledged a share of the expected profits from The Lancasters, an upmarket block of flats in west London, as collateral to its banks, Citigroup and Greenhill, when it negotiated a £750m debt refinancing last year.
The chief executive of Minerva, Salmaan Hasan, accused KiFin of using its complaints to mask a bid to take control of the group, after failing with a 50p-a-share offer earlier this year. "This is all about an attempt to gain control through a smokescreen," he said, adding that disclosures from the group were now "above and beyond those of others in the sector".
Defending Minerva's record, Mr Hasan added: "KiFin has seen a 400 per cent return on its investment in the past 18 months. Frankly, we regard this as tedious and when shareholders see our proposals we are confident that they back the board."
Reports at the weekend suggested that Mr Kirsh and Philip Lewis, his representative in the UK, who will be proposed as interim chief executive, are confident that the coup will succeed after meeting other investors, including Morgan Stanley.
The bank refused to comment yesterday, but it is understood that Morgan Stanley has not lent its support to KiFin at this stage.
In a statement last night, KiFin said: "We are also surprised that the board of Minerva is recommending that its shareholders, as owners of the company, should vote against transparency on such important issues.
"It is only because of our proposed EGM resolution that the board has been pressurised to provide its shareholders today with this rudimentary and price-sensitive information."
Minerva's incumbent management gained the support of its senior independent director, John Matthews, who said yesterday that KiFin's approach was unwelcome. "It is clear to the board that the true purpose of KiFin's resolutions is, without any payment to shareholders, to advance its attempts to control Minerva," he added. "We believe that KiFin's request for additional disclosures is an attempt to distract from this objective."
In a statement to the Stock Exchange, Minerva pointed out that it had reached a number of important milestones, including the refinancing of the business, the sale at a premium of its site at Wigmore Street in the West End of London, and pre-sales of nearly £230m at Lancaster Gate, representing just over half of the total scheme.
Analysts called for a speedy resolution to the situation.
who is nathan Kirsh?
Nathan Kirsh, the South African billionaire who is set to go into battle with Minerva's board, is certainly no stranger to controversy.
A hugely successful property magnate with interests across the globe, Mr Kirsh, 78, is a trustee of the Eurona Foundation and a director of Magal Securities, an Israeli group listed on the Nasdaq and Tel Aviv stock exchanges. The foundation owns a significant stake in Magal, which was one of the biggest contractors on the project to build the wall that separates the West Bank from Israel, and which many Palestinians say has destroyed their livelihoods. The company has attracted stinging criticism from a number of human rights groups. Mr Kirsh's son, Philip, is the president of the popular New York bakeries chain Hot & Crusty.Reuse content