TPG-Axon Capital Management LP, owner of 6.7 percent of SandRidge Energy Inc. (SD:US)’s outstanding shares, requested the company’s board investigate whether Chief Executive Officer Tom Ward and his son acted improperly with regard to acquiring mineral rights.
Ward and his son, Trent Ward, acquired mineral rights from third parties and then leased those rights to Oklahoma City- based SandRidge “just weeks or months later” for profit, TPG- Axon said in a letter sent to the company’s board today. Greg Dewey, a spokesman for SandRidge, did not immediately respond to messages seeking comment.
“It is our understanding that Mr. Ward and his son, Trent Ward, actively compete with the company, and in addition, have also engaged in repeated transactions in which they ‘front-run’ the company,” Dinakar Singh, chief executive officer of TPG- Axon, wrote in the letter.
SandRidge has disclosed several transactions with Ward in its annual federal filing in March, including that it bought a working interest in leases from WCT Resources LLC, which is owned by trusts that are for the benefit of the CEO’s children.
TPG-Axon sued Sandridge and its directors today in Delaware Chancery Court in Wilmington, asking a judge to stop any interference by Sandridge and to extend the start of the 60-day period of consent solicitation.
TPG-Axon has previously called for a shareholder vote on replacing SandRidge’s board of directors.
Ward founded SandRidge after leaving Chesapeake Energy Corp. (CHK:US) in 2006 and owns 5.2 percent of the company’s shares, according to data compiled by Bloomberg.
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