Baja Mining Corp. lost a bid to have securities regulators intervene in what has become one of the nastier proxy battles in Canada, casting doubt on one of the company's claims about the dissident.
Vancouver-based Baja is facing a challenge from a major shareholder, Mount Kellett Capital Management LP, which owns about a fifth of the company. Mount Kellett has lost patience with the company's management and is seeking to install two new directors on the company's board in a vote next month.
At stake is the direction of a TSX-listed company with a $350-million market capitalization and a developing copper project in Mexico.
Mount Kellett argues that Baja is and board conflicts.
Baja alleges that Mount Kellett has a secret agenda to take over the company, and "buried" disclosure of its increasing stake in Baja.
As the battle has gone on, the level of rhetoric has escalated and become outright ugly. Mount Kellett calls Baja's contention of a secret takeover plan a "baseless smokescreen and fear mongering." Baja's latest release accuses Mount Kellett of trying to deceive other shareholders with "phony" explanations of its intentions.
Amid this acrimony, Baja sought to have the British Columbia Securities Commission intervene, alleging violations of early warning and insider reporting rules by Mount Kellett. In its information circular, Baja's management argued that Mount Kellett's accumulation of shares in Baja was hidden in U.S. filings and the investor had chosen the "least transparent option" for disclosing its increasing stake in Baja.
However, the BCSC on Monday declined to step in, saying "there is insufficient evidence to pursue the complaint at this time."