Walter Energy accuses activist fund of 'serious omissions'
March 25 (Reuters) - U.S. coal miner Walter Energy Inc struck back on Monday against the British hedge fund that says it can improve the miner's performance by replacing half of its board, citing "serious omissions" in Audley Capital Advisors LLP's proxy statement.
In a letter to shareholders, Walter Energy said the hedge fund's statement contains omissions regarding the background of its nominees, and noted that one of Audley's candidates has been implicated in an insider trading case. It said also that Audley controls well under 1 percent of its shares.
Audley said in February that it would nominate five candidates for election to the coal miner's board, arguing that poor management, not a tough market, has been behind the company's poor financial results.
In Monday's letter, signed by Walter Energy Chairman Michael Tokarz and Chief Executive Walt Scheller, the company said it had reviewed Audley's nominees and that they lack the leadership experience needed to be board members.
The company also said Audley failed to disclose that one of its nominees, Robert Stan, is currently defending himself against charges of insider trading and tipping when he was chief executive of Grande Cache Coal.
In a notice of hearing dated Dec. 5, 2011, the Alberta Securities Commission accused Stan of sharing material information with his wife, who then sold securities of Grande Cache. It said he had also exercised options to buy securities of Grande Cache during the same period. On the regulator's website, the case is listed as "decision on merits pending".
Walter Energy, which has operations in Western Canada, the United States and the United Kingdom, mainly produces metallurgical coal, used to make steel.
AUDLEY FILES PROXY Continued...