Detour Gold said on Wednesday it had asked the Ontario Securities Commission (OSC) to investigate activist investor Paulson and Co’s campaign seeking change at the company, calling it “concerning and unlawful behavior.”
The U.S. hedge fund, run by billionaire John Paulson, has threatened to replace the company’s board if it does not successfully explore strategic alternatives, including a sale, and look for a new CEO. It owns 5.4 percent of Detour Gold.
Earlier on Wednesday, the hedge fund issued a press release saying Detour Gold had received a buyout offer from another gold miner, but had failed to disclose it publicly. That revelation by Paulson sparked a 13 percent rise in the company’s shares in regular trading.
Paulson said he was informed of the offer in an unsolicited letter by the company’s interim chief executive officer last week, but that Detour would only sign a confidentiality agreement if the party and Paulson agreed to a stand-still agreement.
In response, Detour Gold said it had not received any offer and does not have a sale process in place.
“Detour Gold Corporation notified the Ontario Securities Commission of concerning and unlawful behavior undertaken by Paulson and Co and has asked the OSC to investigate,” the company said in a statement.
Though it had filed the complaint before the hedge fund released its press statement, the company said it believed Paulson & Co’s actions constituted “serious misconduct” under securities laws.
The company also put the blame on Paulson for coming into possession of material non-public information regarding the acquisition offer, adding that these actions were also part of its complaint to the OSC.
Representatives for Paulson and Co were not immediately available to comment.
(Reporting by Anirban Paul and Nivedita Balu in Bengaluru; Editing by Sweta Singh and Anil D’Silva)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)