George Economou has turned up the heat in his war of words with the board and management of New York-listed tanker owner Performance Shipping.
The Greek shipowner is launching a proxy fight, tapping his own nominee to the Performance board and seeking resignations from four existing directors, including chief executive Andreas Michalopoulos.
Economou also wants a look at “certain books and records” of the Nasdaq-listed company pursuant to laws of the Marshall Islands, where Performance is domiciled.
His demands, detailed in a filing with US securities regulators on Friday, represent an escalation of the burgeoning feud between the two sides.
As TradeWinds has reported, Economou in August disclosed a holding of more than 1m shares in the aframax owner, currently pegged at a 9.1% stake, and quickly followed with a broadside against shareholding manipulation in an open letter to the board.
‘Baseless allegations’
A New York securities lawyer representing the Performance board responded with its own publicly filed letter, saying the Economou camp’s letter was “riddled with baseless allegations, errors and mischaracterisations of events”.
Friday’s filing suggests that Economou is neither backing down nor going away soon.
Speaking through his Sphinx Investments, Economou has nominated John Liveris, a veteran of two former New York-listed companies then controlled by the magnate, for election to the Performance board at its next annual shareholders meeting.
Liveris formerly chaired OceanFreight, a Nasdaq-listed shipowner, and held a board seat at Ocean Rig, which had been Economou’s listed play on the deepsea drilling market, between 2007 and 2018.
Economou is further seeking “no confidence” votes and the resignations of four existing directors: Michalopoulos, Loisa Ranunkel, Alex Papageorgiou and Mihalis Boutaris.
Performance Shipping’s current boardroom consists of five directors, including Michalopoulos and his wife, Aliki Paliou, who is chairwoman.
Paliou is a daughter of Simeon Palios, the founder of Diana Shipping and Diana Containerships, the predecessor to Performance since the company changed its name and focus in 2019.
Economou has been highly critical of Performance’s decision in January 2022 to convert common shares into non-voting Series B preferred shares, which then transitioned to super-voting Series C shares.
“The apparent plan was to disenfranchise and strip economic value from Common Shareholders in favour of PSI [Performance]’s controlling shareholder, Mango Shipping Corp — an entity controlled by Aliki Paliou…” he claimed.
The Performance board has countered in a publicly filed response letter that there is no indication Economou owned any shares until the buildup in August, adding: “Sphinx’s recent buying spree of the company shares is nothing more than a transparent after-the-fact attempt to buy a claim.”
Performance is one of several mostly Greek owners that have conducted controversial equity raises through US investment bank the Maxim Group. The Maxim raises have increasingly been criticised by investors and industry figures for their highly dilutive nature.
At the same time, Economou was sharply panned for his treatment of investors and governance practices during 15 years in the US capital markets, primarily through his trademark vehicle DryShips, which went private in 2019.
Economou claims Performance is violating regulations of the Nasdaq and the Marshall Islands.
Sphinx is now pressing “its right under the Marshall Islands Business Corporations Act 1990, as amended, to inspect certain books and records of the Issuer, including without limitation copies of minutes of meetings” at which the shares exchange was discussed.
Performance is registered in the Marshall Islands but headquartered in Athens.
