By Melodie Warner
Investment firm Mount Kellett Capital Management LP has called for the suspension of SandRidge Energy Inc. (>> SandRidge Energy Inc.) 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. (>> Goldman Sachs Group, Inc.) 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 email@example.com
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