SHARES in Bowleven have surged by more than five per cent after it ramped up its defence against the activist investor which has called for a boardroom purge at the Edinburgh-based oil and gas company.

The board of East Africa-focused Bowleven has unanimously urged shareholders to vote against all resolutions to be tabled by its biggest shareholder, Crown Ocean Capital P1, at a general meeting on March 14, including for all but one of its board directors to be removed.

Bowleven, which is working on undeveloped discoveries in Cameroon, rejected the call by Crown Ocean call for a boardroom purge last month. And it stepped up its defence by issuing a rallying call for investors to support its position yesterday.

In a lengthy statement to the stock market, AIM-listed Bowleven claimed that the investor’s intention is to “strip the cash and leave the Company unable to pursue value creation opportunities”, while declaring that Crown Ocean had not presented a “credible strategy” to realise long-term value from Bowleven’s assets.

And Bowleven suggested that the company would be severely weakened if shareholders backed the removal of the bulk of its board, which is led by chief executive Kevin Hart. It said: “Crown Ocean intends to remove the existing board of directors, delivering stewardship of the Company into the hands of unvetted and inexperienced Crown Ocean appointees.

“The Resolutions would result in the nominees of a 15.56 per cent minority shareholder controlling the Board, leaving it with no independent directors representing the interests of Shareholders as a whole and rendering the Company non-compliant with applicable corporate governance guidelines.”

Crown Ocean, now the single biggest shareholder in Bowleven after building up a stake of around 16 per cent, responded by saying that the board had “once more failed to own up to the fundamental issues” it and other shareholders have raised.

It hit out at the Bowleven board for overseeing a “catastrophic financial performance” in the last decade, noting that the company has “raised more than $580 million of equity from shareholders over the last 10 years only to see the share price collapse by around 90 per cent (a collapse the Board acknowledges).”

Crown Ocean went on to criticise Bowleven for failing to come up with a strategy that will maximise value for shareholders, and declared that the “cash burn in the company has been alarming with overall more than $100 million spent in the last two fiscal years alone (with a corresponding $20m in administration expenses) without tangible, successful results.”

Bowleven chairman Billy Allan said: “After full consideration, the Board has concluded that Crown Ocean’s proposal is without merit. Their approach lacks any strategy to maximise the value of Bowleven’s assets and disregards the vital need for a Board to serve all shareholders.

“Crown Ocean proposes a Board structure that is entirely self-serving and a model of bad governance. Their intent is to create a holding company, stripping Bowleven’s cash for its own benefit and effectively removing any viable option to realise the value inherent in the Company’s assets.

“For these reasons, the board unanimously recommends that Shareholders vote against all of the Resolutions proposed by Crown Ocean at the General Meeting.”

In a requisition for a general meeting sent to the company last month, Crown Ocean said it wished to submit resolutions to remove six members of the current board, leaving only chief operating officer David Clarkson in place. It wants turnaround expert Eli Chahin and corporate lawyer Chris Ashworth to be appointed to the board.

Shares in Bowleven closed up 1.75p, or 5.43 per cent, at 34p.