Genco Shipping & Trading has taken off the gloves in its proxy battle with Greek magnate and 5.4% shareholder George Economou.
The Manhattan-based, New York-listed owner of dry bulk vessels rebutted Economou’s barrage of criticisms from last week in a strongly worded message to shareholders after the close of trading on Tuesday as the two sides vie for support on two key issues.
“Don’t be misled by Economou’s attacks on our company,” the Genco board warned shareholders.
“We believe his intentions with Genco are no different than his actions at the many other places he has led or invested during his career: to benefit himself first, without regard to potential harm to the Company or its other shareholders.”
Economou is seeking to remove veteran Genco chairman James Dolphin, an executive with AMA Capital Partners, as a symbol of dissatisfaction with Genco’s trading price, which Economou charges has lagged both net asset value and peer valuations.
Economou is seeking to appoint his own nominee — business executive Robert Pons — to the seven-member board.
Genco has previously rejected Pons as a director, and in Tuesday’s filings put some meat on the bones of its reasoning.
“Pons has been a professional pawn to activists with shady track records throughout his career and we believe he has demonstrated no ability to exercise independence,” the company said in the letter.
Pons has served as a director nominee on behalf of the family of Gary Singer, a convicted felon permanently barred by the US Securities & Exchange Commission from being an officer or director of public companies, Genco alleged.
A Kalani flashback
Pons also appeared on an activist slate related to Canadian financial firm Murchinson Ltd, which Genco said settled charges of short-sales violations with the SEC in 2021.
Murchinson and its owner, Toronto hedge fund executive Marc Bistricer, were first reported by TradeWinds in April 2017 to be behind Kalani Investments, a British Virgin Islands financial firm that pumped nearly $450m into Economou’s DryShips while also taking stakes in Greek owners Top Ships and Diana Containerships.
Investors later alleged that the series of dilutive share sales involving Kalani, combined with repeated reverse stock splits, claimed more than 99.9% of DryShips’ equity value.
“We believe that Economou’s actions at DryShips, his last public company, are indicative of how he has conducted business throughout his career and serve as a warning to Genco shareholders,” Genco said in its letter.
“The actions were characterised by abrupt and perplexing deviations of corporate strategy, high financial leverage at peak market cycles, self-dealing and poor corporate governance …
“Through a series of steps, Economou took his ownership stake in DryShips from 0.1% in March 2017 to 83% of the stock less than two years later, destroying other shareholders’ value in the process.”
Besides the proxy war with Genco, Economou has over the past year taken an activist stance in several other US-listed companies, all of them Greek. He has pending litigation against Performance Shipping in the New York Supreme Court and Stamatis Tsantanis’ Seanergy Maritime in the Marshall Islands.
Genco has been rated first in equity analyst Michael Webber’s “scorecard” of public owners based on environmental, social and governance practices for the past three years. Economou’s DryShips routinely finished last in the same Webber tables.
During discussions in recent months, Economou has pushed Genco management not only for share buybacks but also to launch a tender for its shares at a premium price that presumably would allow him to sell, the shipowner said.
