U.S. hedge fund Pentwater Capital is calling for Rio Tinto (RIO -0.5%) to appoint four new independent directors to represent the interests of minority shareholders at Turquoise Hill Resources (TRQ +1.1%), the Rio-controlled company overseeing the Oyu Tolgoi mine in Mongolia, Financial Times reports.
Pentwater, which owns a 9% stake in Turquoise
Hill, says it has become increasingly alarmed at the mismanagement of a
critical underground expansion project at Oyu Tolgoi and the timing of
market disclosures.
The hedge fund wants its CEO, Matthew Halbower, to
be appointed to Turquoise Hill's board and says it will seek adoption
of a shareholder proposal that would give minority shareholders the
right to nominate and elect three of the company's seven non-executive
directors.
The motion will be voted on at Turquoise Hill's annual meeting in May.
Rio is sinking more than $5B into the underground
expansion project, which is aimed at raising Oyu Tolgoi's production to
more than 500K mt/year.