Dominion Diamond investors to push for boardroom shakeup: source

• A group of activist shareholders plans to ask for several seats on Dominion Diamond Corp.’s board at a meeting with the company planned for early January and will seek to put forward its own slate of directors if it cannot oust the miner’s chairman and its chief executive, according to a source.

The investor group, which owns a 5.4 per cent stake in Dominion and is led by Toronto- based hedge fund K2 & Associates, said in a filing this week that it believes the Canadian diamond miner’s policies have hurt its share price.

The group is unhappy with the performance of Dominion CEO Brendan Bell and chairman Robert Gannicott, said the source, who is an investor in Dominion and familiar with the situation. “My understanding is that if the group is unsuccessful in securing the resignations of the chairman and CEO, they will request a meeting of shareholders and put forward an alternate slate of directors,” the source said.

On Thursday, Dominion an- nounced the surprise resignations for “personal reasons” of two independent board members — Dr. Fiona Perrott-Humphrey and Ollie Oliveira — who have a wealth of experience in the mining industry.

BMO analyst Edward Sterck said he has no reason to doubt the company’s statement, but added that the timing is likely to lead the market to believe the events are linked to the pressure from activists.

Perrott- Humphrey and Oliveira could not be reached for comment.

The activist investor group has cited concerns with Dominion’s corporate governance, business strategy, capital allocation and other issues.

Dominion’s stock is down some 40 per cent since early June.

The stock on Thursday closed 2.9 per cent higher at $14.03 on the TSX.

Dominion, which owns stakes in two of Canada’s biggest diamond mines, has said it looks forward to dialogue with the investor group.