Mark Rendell
Mark Rendell

Dominion: Shake-Up At The Top

Gannicott to pass on chairman role to industry vet Gowans, while company critic Vejvoda joins board.
Domnion owns around 90 percent of Ekati

In a shake-up among the upper echelons of Dominion Diamond Corp., it’s been announced that long-time chairman Robert A. Gannicott will be handing over the company’s reins “in the near future,” while at the same time a member of an aggressive shareholder group has been appointed to the board.

Prominent industry veteran Jim Gowans, one of two new board members, will become chairman, according to a statement from Gannicott sent out in a press release this afternoon.

“Both the Company and I have faced certain changes recently,” said Gannicott, who took an eight-month medical leave of absence in 2015. “For the Company, these represent opportunities but in my case they represent medical challenges… It is with great confidence that I anticipate handing over the chairmanship to Jim in the near future.”

Gowans, a former chair of the Mining Association of Canada, has significant experience in the mining industry, serving as CEO or COO of DeBeers Canada, Barrick Gold Corp. and Arizona Mining Inc., among others.

The other significant news is the appointment of Josef Vejvoda to the board. Vejvoda “was identified and proposed to Dominion by a group of shareholders,” that has been rattling the company’s management over the past month.

In December, Vejvoda, a portfolio manager at K2 & Associates Investment Management Inc., a Toronto-based hedge fund which reportedly represents a group of investors with a 5.4 percent stake in Dominion, shot off a missive blaming Dominions management for low share prices.

According to the Globe and Mail, Vejvoda argued that Dominion’s shareholders had “suffered excessively and unnecessarily as a result of misguided policies and missed opportunities.” He pushed for a meeting between the company and the shareholder group, which was scheduled to take place last week.

Clearly some sort of agreement with the group was reached at this meeting; according to the release, the shareholder group “has entered into an agreement with Dominion which includes a customary standstill on the part of the Group.”

Vejvoda, who brings “extensive experience with and knowledge of Canadian capital markets,” has been on something of a board-joining spree over the past year, most recently being appointed to the board Acerus Pharmaceuticals Corp., and before that, other companies such as ShoreTel, Inc., Absolute Software, and PNI Digital Media Inc., “where he was Chair of a Special Committee that oversaw the successful sale of PNI to Staples Inc.”

What having an activist shareholder as a board member means for the company moving forward remains to be seen, though it was reported by Bloomberg in December that Dominion hired Rothschild & Co. to work on a potential sale of the company. The company’s stocks did leap upwards following the publication of Vejvoda’s letter in December.

The appointment of two new board members follows the recent departure of Fiona Perrott-Humphrey and Ollie Oliveira, who left the company in December “for personal reasons.”