HudBay Management: Incompetence vs. Incompetence?

Articles in the Globe & Mail and National Post regarding the running battle between the present management and the management proposed by the dissident shareholders, reminds me of the feud between the Hatfields and the McCoys , the only difference being name calling instead of bullets. The incumbents are calling the proposed management / directors, led by former president, Peter Jones, incompetent. His claim to fame, they maintain, was timing. He took over the company on the eve of a massive surge in commodity prices. Under his stewardship, shareholder value surged to nearly $30 per share and the company treasury was bulging with cash.

The dissidents charge the incumbents’ with incompetence, because of their blurred vision of future growth through questionable acquisitions and the consequent deterioration of shareholder value to $ 3.00 per share. The Guatemalan nickel-laterite venture could be profitable if the price of nickel rises to $ 8-12 per pound. Fortunately, the Ontario Securities Commission intervened to give the shareholders a vote on the Lundin acquisition. Consequently, HudBay management cancelled the deal. Now they have to face a non-confidence vote by the shareholders.

Is there something wrong with the HudBay corporate culture? Under both Peter Jones, and Palmier Callinan Mines has had to resort to legal action in order to force management to disclose the records re the profits from the 777 Mine in which Callinan owns a 6 2/3% NPI royalty. It has taken a Manitoba court order to force HudBay to comply. This is all about disclosure or the lack of it. There could be considerable damages to HudBay shareholder value if the court rules in favour of the Callinan claim. By forcibly lifting the corporate veil of secrecy, the sight may not be pretty. Is there a shadow of incompetence perpetually hovering over HudBay's corporate culture or is it merely the lure of controlling the cash in the bank? The HudBay shareholders will soon decide.