2013-03-22 15:40:00 - Feldman would not comment on many points as his allegations against SandRidge, Ward and Grubb is still pending at court, he did note, “The truth can’t be hidden forever. Ward and Grubb’s actions have hurt a lot of people, including investors like me. The extent of that harm and how far it has rippled out is only now beginning to surface.”
Greenwich, Connecticut, United States of America, March 21, 2013 – SandRidge Energy, Inc. struck a deal with hedge fund TPG-Axon this week to add four additional board seats for the dissident shareholder, putting CEO Tom Ward’s position with the company in jeopardy. Jonathan Feldman of Millennium Drilling and Patriot Exploration, one of the investors who was financially damaged by SandRidge’s misrepresentations, said on Thursday that this was bound to happen.
Activist hedge fund TPG-Axon, which is one of the biggest stockholders in SandRidge Energy, has expressed increased frustration over the company’s mismanagement and recently demanded the removal of Ward “for governance lapses and strategic missteps” as reported by Reuters. ( www.reuters.com/article/2013/03/13/us-sandridge-settlement-idUSB ..). The move came after a series of botched decisions
came to light, spurring calls for the resignation of SandRidge CEO Tom Ward.
“To call it ‘governance lapses and missteps” is to put it mildly,” says Feldman. “We lost about $15 million dollars because we trusted the representations of Ward and Grubb, and the documents they submitted to the SEC on behalf of SandRidge. But TPG-Axon has a whole lot more riding on SandRidge, and for them, it was now or never.”
In addition to “strategic missteps,” TPG-Axon has also alleged that Ward and his cronies allowed a company run by Ward’s son to acquire the rights to drill for oil and gas near SandRidge operations.
Though many investors like Jonathan Feldman of Millennium Drilling had already been hurt by actions and omissions of SandRidge, Ward and Grubb in soliciting investments, TPG-Axon only recently began ringing the warning bells from November 2012, after Reuters carried an investigative report on Ward’s doings.
“In our case,” Feldman said, “we expected the CEO of a publicly-traded company to provide reserves figures that are reflective of actual results verified by their outside engineers this allows investors make the right decision. But they manplilated reserves that misled investors as to the profitability of the nature of their operations. They did this by not disclosing the loss involved in natural gas production due to ‘plant shrink.’ ”
It was possible for Ward to act with impunity, to a large extent based on his employment contracts. SandRidge’s board gave Ward and his family extremely wide options to profit from personal deals in a manner that could have potential conflicts of interests with the company. Reuters unearthed the information in its investigations.
Feldman noted that he has suffered irreparable damage as a result of this, by trusting SandRidge, Ward and his cronies. “Any investor in my shoes would have accepted reserves forwarded by the CEO and CFO of a big oil and gas company that is publicly traded. But such acts of clever deception have to end somewhere. The truth is now coming out of the woodwork.”