The logo for Canadian mining company Teck Resources Limited above its booth at the Prospectors and Developers Association of Canada (PDAC) annual conference in Toronto on March 7.CHRIS HELGREN/Reuters
A director at Teck Resources Ltd. TECK-B-T with ties to China stepped down from the board ahead of the failed vote by shareholders to split the company in two, as questions remain over how major shareholder China Investment Corp. (CIC) voted.
Quan Chong, a resident of Beijing, and a former government of China representative, did not stand for re-election on Wednesday at Teck’s annual meeting.
Mr. Chong joined Teck amid public controversy in 2016, as he was an active deputy of the National People’s Congress of China at the time, raising concerns about the potential for Chinese interference into Canada’s biggest diversified mining company. Mr. Chong continued to work for the Chinese government until March, 2018.
Vancouver-based Teck on Wednesday announced it was not proceeding with a restructuring that had been years in the making, after it failed to win sufficient support from its class B shareholders.
Teck has not revealed whether its biggest B shareholder, China’s state-controlled CIC, voted for or against the split, or even if it voted at all.
By not convincing its B shareholders to vote for the split, Teck has increased the odds of being acquired by Swiss mining and commodity trading giant Glencore PLC, which has a hostile takeover proposal on the table.
Since Teck was originally approached by Glencore as early as 2020, Mr. Chong, as a board member, would have been privy to the talks. It is not known whether Mr. Chong was in favour of a deal with Glencore, or if he backed Teck’s management, who repeatedly rebuffed the Swiss conglomerate’s advances.
Teck did not send out a news release highlighting that Mr. Chong was stepping down from the board, but there was a brief mention of his intention to not seek re-election in Teck’s 449-page management information circular, which was released on April 3. That same day, Teck disclosed that it had rebuffed a revised takeover proposal from Glencore.
Mr. Chong could not be reached for comment for this story.
Teck spokesperson Chris Stannell did not respond to any specific questions about Mr. Chong, writing in an e-mail to The Globe and Mail only that the director had retired from the company.
Mr. Chong joined Teck at a time when the company already had another government of China proxy in the company. CIC had invested in Teck seven years prior, acquiring 17.2 per cent of the Canadian miner when it was struggling to meet its hefty debt obligations incurred in a disastrous top-of-the market acquisition.
CIC had reduced its holdings on several occasions over the years, booking massive profits in each instance. Heading into the split vote this week, CIC had a 10.3 per cent stake, still giving it massive clout on the outcome.
Mystery surrounds the conduct of CIC in the weeks, days and even hours before Teck announced its split vote had failed.
The Globe reported earlier this week that CIC evidently missed the proxy deadline to vote, which was 48 hours in advance of the shareholder meeting. The voting intentions of CIC were unknown to Teck controlling shareholder Norman B. Keevil roughly 12 hours before the meeting, The Globe also reported.
About 78 per cent per cent of Teck’s B shareholders cast their vote at the annual meeting, leaving enough margin that CIC may have abstained.
A timeline of the takeover bid for Teck Resources
Mr. Chong departed Teck not long after Canada’s federal government had signalled that Chinese investment in Canadian critical minerals companies is no longer welcome. Late last year, Ottawa said that it would only allow investments by Chinese state-controlled companies on exceptional grounds from now on.
The crackdown came after slack oversight in the past, and as Canada makes a concerted effort to strengthen the country’s position in critical minerals. China currently dominates the global critical minerals industry.
Niall McGee