By Dow Jones Business News,
January 14, 2014, 08:25:00 PM EDT
TORONTO--One of Barrick Gold Corp.'s largest investors has written to the mining giant expressing "concern" over the
surprise resignation of two directors and calling for Anthony Munk, a director and the son of departing chairman Peter
Munk, to step down.
The letter, from London-based investment fund Oldfield Partners LLP, comes as a number of other funds tell Barrick of
their continued disquiet over corporate governance at the world's largest gold miner, a drama the Canadian company tried
to put behind it when it announced a series of board changes in December.
Some of Canada's biggest pension funds are set to meet in February with incoming Chairman John Thornton to discuss
their concerns over the December departure of directors Robert Franklin and Donald Carty, among other matters, people
familiar with the matter said.
The two men resigned in protest over what they believed was the influence of Peter Munk on the hiring of new directors
and amid concern that the 86-year-old departing co-chairman would continue to exert influence on the company he founded
even after he steps down in the spring, according to people familiar with the matter.
"Mr. Munk has announced that he will be stepping down...any suggestion that he will exercise outsize influence after
that are unfounded," a spokesman for Barrick said.
In the letter, Oldfield Partners said it shares "the concern of some other investors' about the resignations of Mr.
Carty and Mr. Franklin. According to a copy of the letter reviewed by The Wall Street Journal, Oldfield Partners said it
was "pleased" by the proposed board changes and acknowledged Barrick's increased focus on shareholder returns.
"To that end we feel that retirement from the board after very long service of Anthony Munk at the same time as his
father would be helpful demonstration of commitment (to shareholder returns) by the new leadership," according to the
letter, which was signed by the fund's chief executive and founder, Richard Oldfield.
Oldfield, which manages around $6.1 billion in assets, owned around 9.6 million Barrick shares in September 2013,
ranking it the miner's 14th-largest shareholder, according to FactSet.
Anthony Munk, who didn't immediately return calls seeking comment, is a successful businessman in his own right and a
senior managing director of Onex Corp., a Canadian buyout firm that oversees about $16 billion in assets.
At least one other Barrick shareholder has called for Mr. Munk to step down.
"I think just having the Munk presence there is going to weigh on the board and people are not going to think that
Peter is very far away as long as Anthony remains," said Michael Sprung, founder of Toronto-based Sprung Investment
Other fund managers are more focused on asking Barrick to explain why Mr. Carty and Mr. Franklin stepped down. They
complain that the company was silent when the departures happened.
"I believe that it is in the board's best interest to be transparent as to why these two directors resigned, and
communicate how they are resolving the issues which led to the resignations," Catherine Jackson, a corporate-governance
adviser at Dutch pension asset manager PGGM Vermogensbeheer B.V., said in an email in late December.
In the summer, PGGM led a group of mainly European fund managers pressing for a boardroom shake-up at Barrick.
In February, Mr. Thornton and a number of directors will meet with a group of Canada's largest pension funds, which
have asked Barrick to explain the resignations and outline the company's strategy under its new chairman, according to
people familiar with the matter. The funds also want to know the reasoning behind some of the choices of new directors,
according to one of these people.
"Shareholder engagement is important to us and we will be meeting with a number of investors in the coming weeks to
provide a detailed update on our progress, in addition to addressing any outstanding questions they may have," the
Barrick spokesman said.
Still, some investors say they were pleased with the changes in December and have no complaints about Anthony Munk.
"I don't have an issue with (Mr. Munk) continuing to serve on the board; there's nothing to indicate that he wouldn't
operate in the best interests of the company," said Don Reed, manager of Templeton International Stock Fund, which has a
small stake in the mining company.
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