Russian financier tightens grip on Gulfsands Petroleum

A Russian financier and the main shareholder of UK-listed oil explorer Gulfsands Petroleum has tightened his grip on the company with the appointment of an ally as executive chairman following months of public feuding among directors and shareholders.

Michael Kroupeev's investment vehicle Waterford in February failed in its effort to remove Mahdi Sajjad, Gulfsands' chief executive, but on Tuesday the company announced its top manager had been "removed" from his position, although he would stay on the board.

Alastair Beardsall, an oil industry veteran, has become Gulfsands' executive chairman with immediate effect, with the backing of Waterford, which owns 27 per cent of the company.

The board changes follow a series of public disagreements among directors about how best to manage exploration projects in Morocco and residual assets held by the company.

Gulfsands' market value collapsed after the suspension of production at its fields in Syria, the company's main assets, in late 2011.

"Mr Beardsall and the other executive directors will evaluate the company's strategic options and related funding requirements and seek a consensus within the board and amongst shareholders and stakeholders over the future of the company," said Gulfsands.

One person close to the company, which needs to raise about $25m to meet loan obligations and working commitments in Morocco, said the new board would command broad support from previously feuding shareholders.

"All the major shareholders in this stock are agreed to these changes," he added.

These shareholders include Rami Makhlouf, one of Syria's wealthiest businessmen and cousin of the president Bashar al-Assad.

Mr Makhlouf has previously supported Abdul Rahman Kayed, Gulfsands' second-largest shareholder with a 10 per cent stake, who opposed Mr Kroupeev's attempts to remove Mr Sajjad as chief executive.

Mr Makhlouf has been subject to EU sanctions including a travel ban based on the allegation that he had provided "funding to the regime allowing violence against demonstrators".

The potential for further conflict following the appointment of one of Mr Kroupeev's allies as executive chairman was recognised in a company statement on Tuesday.

Gulfsands conceded Mr Beardsall, a director of other companies backed by Waterford, could not be considered independent of Mr Kroupeev.

Mr Beardsall had, therefore, agreed to sign a relationship deed with the company which commits him to fair dealings in handling any potential conflicts.

In addition, Mr Beardsall had committed to "exercise his function as executive chairman in the best interests of the company and all its shareholders".

Andrew West, Gulfsands' previous chairman who survived a vote on his own removal brought by Waterford at February's extraordinary company meeting, has also agreed to relinquish his position although he will stay as a non-executive director.

Mr West thanked Mr Beardsall for taking over leadership of the company "at such a difficult moment", adding: "I ask that, in the company's best interests, all shareholders, directors and employees now rally behind him, as I myself intend to do."

Analysts at SP Angel said the appointment of Mr Beardsall was welcome. "Gulfsands has assets, albeit one in distress and beyond reach," they said. "Given Alastair's knowledge of the asset, and the environment, he is ideally placed to be able to assist the company if there is anything to be done."

Shares in Gulfsands were down 5 per cent at 20.25p on Tuesday, valuing the company's equity at about £24m.

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