Part of JFX’s Russian operations

The battle for control of JKX, a London-listed oil company, intensified on Monday when its board of directors moved to ban two of its biggest shareholders from voting at a key meeting later this week.

JKX, which drills for oil and gas in Russian and Ukraine, has been in conflict with its second-largest shareholder after Proxima Capital, an investment fund, this month called for a clear out on its board.

Proxima’s proposal, which recommends the removal of seven board members including Paul Davies, chief executive, will be voted on by shareholders at a meeting on Thursday. JKX has accused Proxima of trying to secure a takeover of the company without making a bid and paying a premium.

The move by JKX on Monday to bar Eclairs Group and Glengary Overseas — its largest and fifth largest shareholders — from voting at Thursday’s meeting is the latest development in an extraordinary tussle for control of the company. The battle has seen some of Russia and Ukraine’s most powerful oligarchs lock horns with JKX’s long-established management.

If Eclairs, Glengary and Proxima voted together, their stakes would be sufficient to secure an overhaul of JKX’s board.

Explaining the move to bar Eclairs and Glengary from voting at Thursday’s meeting, JKX said it had not been able to obtain accurate ownership structures for the stakes they hold in the company.

Eclairs and Glengary could choose to challenge JKX’s move in the courts.

Eclairs did not respond to requests for comment on Monday, but has previously said it was examining Proxima’s proposed list of new directors for JKX. Glengary could not be reached.

One person close to Proxima said it thought Eclairs and Glengary would support its proposal to shake-up the JKX board.

But Vladimir Tatarchuk, chief executive of Proxima, told the Financial Times he was not working in conjunction with Eclairs and Glengary.

Eclairs, controlled by the Ukrainian billionaire Igor Kolomoisky, and Glengary, run by the Russian oligarch Alexander Zhukov, attempted unsuccessfully in 2014 to remove the JKX board, including Mr Davies, who has been chief executive since 1998.

Mr Tatarchuk’s case against JKX has highlighted the 90 per cent fall in its share price over the past five years.

He said he believed JKX’s costs had spiralled out of control — for example, he criticised the company for having a head office in central London.

Mr Tatarchuk, a former head of corporate finance at Russia’s Alfa-Bank, also argued that JKX has mismanaged its long-running legal case against the Ukrainian authorities for $270m it says it is owed in overpaid production taxes for oil and gas.

Asked what his plans were for JKX, Mr Tatarchuk said he wanted to “focus on operational efficiency and not [have JKX] fighting Igor Kolomoisky”. But he said he could not go into more detail until he had opened up the company’s books.

A Proxima spokesman said the fund intended to push ahead with the vote on Thursday in spite of JKX’s move to stop Eclairs and Glengary attending the shareholder meeting.

People close to JKX said the Proxima proposal had all the hallmarks of a Soviet-style corporate raid. Mr Davies said earlier this month: “That is how you grow companies in Russia, but it is not how we do business here.”

JKX CEO Paul Davies

JKX has blamed the fall in its share price over the past five years on political problems in Russia and Ukraine, and the collapse in the value of crude.

One person close to JKX said the company’s activities had also been severely hampered by Mr Kolomoisky’s involvement.

Mr Kolomoisky is considered politically toxic in Russia, where he is the focus of president Vladimir Putin’s personal enmity, as well as being a controversial figure in the west.

One person close to JKX said Proxima’s proposal could lead to the break-up of the company, with Mr Kolomoisky taking control of its Ukrainian assets.

“Either Proxima has got a nod and a wink from Kolomoisky; or they’re opening up a situation that they won’t be fully in control of,” said this person.

JKX has been backed by Institutional Shareholder Services, a shareholder advisory group. ISS said in a report last week: “[Proxima] have not presented a compelling case that the company has substantially underperformed its peers in recent years.”