Raging River Capital initiates investigation over alleged insider trading at Taseko

JOHANNESBURG (miningweekly.com) – Amid concerns of suspected underhanded practice, Raging River Capital (RRC) has initiated an investigation into alleged insider trading at TSX-listed Taseko Mines as the battle between the 5.1% shareholder and the base metals producer’s leaders continues.

RRC lodged its intent to probe whether Taseko CEO and director Russ Hallbauer and VP Brian Battison engaged in share purchases while in possession of nonpublic, material information with the British Columbia Securities Commission. RRC had alerted the Toronto Stock Exchange, the New York Stock Exchange and the Securities and Exchange Commission.

The activist shareholder was claiming that the duo had been aware of negotiations between Taseko and Red Kite to secure a $70-million senior secured credit facility agreement, which was subsequently entered into on January 29.

Hallbauer purchased 652 074 Taseko common shares, in multiple trades, both directly and indirectly, between January 15 and 25, while Battison secured 31 000 of Taseko's common shares, also in multiple trades, both directly and allegedly through an apparent family member, on January 19, said RRC managing partner Mark Radzik this week.

The transaction with Red Kite was announced publicly on February 1, following which, on February 8, Taseko filed a Material Change Report, which indicated that the agreement was a material change.

This followed on the base metals producer’s defense of its operations, policies and procedures, as well as a dispute surrounding Taseko’s use of – and the role played by – Vancouver-based professional services firm Hunter Dickinson (HDI), amid an ongoing proxy contest.

Mining Weekly Online earlier this week reported that Taseko would add two new independent directors to its board and make changes to its policies and procedures that would give shareholders more say on the company’s relationship with the long-time services provider with which Taseko had certain directors and shareholders in common.

“RRC has made a number of unwarranted assertions with respect to Taseko’s advantageous relationship with HDI,” said Linda Thorstad, who was appointed chairperson of a special committee of independent directors formed to assist Taseko’s board in its response to RRC’s meeting requisition.

Early in January, RRC requisitioned a shareholder meeting, which had been set for May, in what Taseko believed was a move to get four seats on the board.

Hallbauer previously commented that RRC was a recently created entity, with no mining assets or operations, that had started accumulating Taseko shares on December 29, two weeks before the requisition.

“While we welcome the views of all shareholders, it is unfortunate that RRC made no good faith effort to constructively engage with us before rushing into what will likely be a costly proxy contest,” he said.

In February, Taseko accused RRC of non-transparency after failing to disclose bond-buying activity, which put it at odds with fellow Taseko shareholders, and a corporate bankruptcy allegedly involving one of its proposed nominees for Taseko’s board, something that RRC denied.

“Concerns over insider trading are the latest proof that point to the lack of oversight by the Taseko board and raise questions about the legitimacy of all other insider dealings,” reiterated Radzik, calling on the replacement of incumbent directors Ronald Thiessen, Hallbauer and Robert Dickinson with the independent nominees put forward by Taseko's shareholders.