Pentwater Condemns Rio Tinto’s Unethical Termination of Turquoise Hill CEO
NAPLES, Fla. — Pentwater Capital Management LP (“Pentwater“), the largest minority shareholder of Turquoise Hill Resources Ltd. (“Turquoise Hill” or the “Company“) (TSX:TRQ) (NYSE:TRQ), believes that the Boards of Rio Tinto and Turquoise Hill have breached their fiduciary obligations. To quote Canaccord Genuity in a note published yesterday morning:
Goodbye, good governance – we hardly knew ye! Mr. Quellmann was the first CEO in our long history with TRQ [Turquoise Hill] that we believed actually pushed back on Rio and stood up for decisions that were in the best interests of all shareholders.
Yesterday, it was announced that Rio Tinto told the Board of Directors of Turquoise Hill to terminate Turquoise Hill’s CEO Ulf Quellmann, because he had taken some actions to protect minority shareholder interests from the unethical practices of Rio Tinto. The Board of Turquoise Hill then bent to the will of Rio Tinto and told Mr. Quellmann that he could be fired or agree to resign and take hush money paid by Turquoise Hill.
Pentwater’s CEO Matthew Halbower stated, “In over 20 years of investing in companies around the globe, I have never seen poorer corporate governance than has been exhibited by Rio Tinto and Turquoise Hill. Mr. Quellmann’s brazen termination serves as just more proof of what was already clear to all: Rio Tinto has no respect or regard for good corporate governance or the minority shareholders of Turquoise Hill. The Turquoise Hill Board should be ashamed of itself for serving as Rio Tinto shills and equally ashamed of itself for taking much needed cash from Turquoise Hill to buy Mr. Quellmann’s silence.”
In current months, in action to a proxy contest waged by Pentwater Capital and a class action claim versus Mr. Quellmann, Blue-green Hill and Rio Tinto, to name a few, Mr. Quellmann lastly began pressing back versus Rio Tinto. Blue-green Hill took Rio Tinto to official arbitration. Blue-green Hill voted with the federal government of Mongolia to start an official examination into Rio Tinto. Blue-green Hill even applied for a momentary injunction with the arbitrator and was given it when Rio tried to avoid Blue-green Hill from interacting with the federal government of Mongolia. Clearly, having a Blue-green Hill CEO take any action to withstand Rio Tinto was excessive for Rio to bear.
The board of directors of Blue-green Hill must repent of themselves for having no foundation in supporting their CEO versus the recriminations of their Rio Tinto overlord. Pentwater advises the board of its commitment to safeguard minority investors which the directors will be held liable for their continued rejection to do so.
David Zirin- Chief Operating Officer
Pentwater Capital Management
Jobber Wiki author Frank Long contributed to this report.