SandRidge CEO's family amasses big land stake near company-fund
NEW YORK (Reuters) - One of SandRidge Energy Inc's largest shareholders, pushing to remove its chief executive, alleged on Tuesday that a company controlled by the CEO's children has amassed around 475,000 acres near SandRidge's operations.
Hedge fund TPG-Axon, which has launched a campaign to remove all of SandRidge's board and replace CEO Tom Ward, claimed WCT Resources, an oil and gas company formed from trusts benefiting Ward's three adult children and run by his eldest son, Trent, is the fifth largest company doing business in the Mississippian shale formation that spans parts of Oklahoma and Kansas.
Oil and gas company SandRidge owns the most acreage in the Mississippian.
TPG-Axon alleges that land owned by WCT Resources in the Mississippian will benefit from SandRidge's efforts to build infrastructure in the region, adding that a smaller company like WCT Resources was not likely able to shoulder such a cost-intensive process.
TPG-Axon owns 6.7 percent of SandRidge's outstanding shares. The hedge fund has been campaigning for changes at the company since November.
SandRidge's board has given Ward wide latitude to profit from personal oil-and-gas deals in ways that pose potential conflicts of interest, according to a Reuters review of employment contracts and recent transactions.
SandRidge could not be reached immediately for comment. The company said proxy advisory firm Egan-Jones has recommended shareholders reject TPG-Axon's campaign to remove the company's board.
On Friday, another proxy advisory firm, ISS, recommended shareholders vote to replace a majority of SandRidge's board, backing five of TPG-Axon's nominees.
On January 25, SandRidge responded to shareholder allegations that Ward and his family improperly sold acreage to SandRidge. The company said it found no wrongdoing in the transactions. Impartial members of its board review all related-party transactions, the company said.
"TPG-Axon goes to great lengths to establish that WCT Resources owns leasehold acreage adjacent to acreage held by the company," SandRidge said, noting that it owns interests in nearly 5 million of the 17 million acres in the Mississippian region. "Virtually all companies active in the play are likely to have some interests that could be characterized as adjacent to the company's holdings."
(Reporting by Michael Erman; Editing by Jeffrey Benkoe)
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