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Natlata to Report PetroNeft Board for Breach of Corporate Governance

LONDON, April 17, 2014 /PRNewswire/ --

Natlata Partners Limited ("Natlata"), the private investment company that is the largest single shareholder in PetroNeft Resources PLC ("PetroNeft" or "the Company") (AIM: PTR) announces that it is to report the Board of PetroNeft to the appropriate authorities for being in breach of AIM Rule 20.

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AIM Rule 20 requires listed companies to make available on their website pursuant to AIM Rule 26 all documents that are provided to shareholders. PetroNeft has failed to place on its website a letter sent by the Board to shareholders recommending that they vote against all motions proposed by Natlata at the forthcoming EGM. Furthermore, the letter, which gives shareholders no option to vote in favour of the motions, again calls into question the corporate governance practices of the Board.

The Board of Petroneft has previously defied best corporate governance practice by:

  • Refusing to give shareholders any say in a potential farm-out deal and reviewing all financing alternatives;
  • Having a clear conflict of interest with one board member and significant shareholder also being the beneficial owner and general director of the only drilling contractor used by the Company;
  • After Natlata requisitioned the EGM, the Board carried out a placing of nearly 10% of the Company's share capital to an undisclosed, unidentified, closed group;
  • Including just one quasi-independent director on a seven member Board.

Commenting on the Board's letter, Maxim Korobov, Natlata's controlling shareholder, said, "As a shareholder of Petroneft, I am deeply concerned with the flagrant disregard for proper Corporate Governance at the Company. Management is answerable to the owners of Petroneft, the shareholders, and to date key decisions, such as the farm out of Petroneft's core asset Licence 61, have been conducted behind closed doors. There has been no opportunity for shareholders to have any say in the future of their company whatsoever.  Management's decision to send shareholders a letter that only gives the opportunity to vote 'against' the EGM resolutions further demonstrates that the Company gives no value whatsoever to what the shareholders think. It is clearly time for change."

A copy of a fair voting form enabling shareholders to vote either FOR or AGAINST Natlata's proposals is available for download at http://www.value4petroneft.com/voting-form. Natlata urges all shareholders not to cast their votes on the EGM resolutions until 22 April 2014 when the Company has announced the terms of the farm-out.

About Natlata Partners Limited

Natlata Partners is a private investment company that seeks out investments with a focus on Russia and CIS countries that appear to be distressed or are at an early stage of development and which will clearly benefit from effective management and proven sector experience.  For more information about Natlata and our investments please contact [email protected].  More details on our proposals for PetroNeft can be found at http://www.value4petroneft.com.

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