Yesterday, Thursday 25 February, GCM Resources plc held on online AGM from which it excluded all but a handful of its shareholders, hiding behind COVID-19 restrictions – as if people might catch the virus by participating in an online meeting!

In the written Notice of Annual General Meeting which the company sent by post to its shareholders, GCM attempted to sweeten the bitter pill of exclusion from the AGM by inviting shareholders to send in written questions by 6pm on Monday 22 February, pledging that “These questions will be posed to the Board and the Directors’ responses thereto will be uploaded to the website at later on the day of the meeting.” Questions may have been posed to the Board, but the Directors’ responses were not uploaded to the company’s website on the day of the meeting. Answers were finally posted on the company’s website on 4 March.

In the mailed Notice of Annual General Meeting the company also told shareholders: “The Directors will not be required to answer any questions if (i) to do so would involve the disclosure of confidential information or (ii) the answer has already been given on a website in the form of an answer to a question or (iii) it is undesirable in the interests of the Company that the question be answered.” That’s a pretty catch-all excuse for not answering any questions.

We think they should answer all our questions without delay.

Below are the questions that LMN posed to the company on behalf of our allies.

Question 1

On page 7 of the 2020 Annual Report, GCM Resources lists climate change risk as one of its “predominant risks and uncertainties”. Given that coal mining and coal fired power is the company’s only businesses, when will the company publicly disclose, through the use of tools like the Task Force on Climate-Related Financial Disclosures (TCFD), how the company has stress tested its assets for future resilience/ NPV in a scenario where the goals of the Paris Agreement are met? Did GCM’s auditors consider the coal and carbon price forecasts consistent with a 1.5°C warming scenario, or a well-below 2°C warming scenario, while considering the company’s future business?

Question 2

Multiple news reports in August 2020 (see, for example, stated that in Bangladesh, “Coal power is no more a cheap option”, with plans that may ditch 90% of its planned coal power, including GCM’s proposed coal power projects. This is contradictory to what GCM states in the 2020 Annual Report that “Coal remains a cheap and abundant primary energy supply for developing countries like Bangladesh” and for future outlook, the company is “fully committed to the Phulbari Coal and Power Project”. How does GCM plan to manage the increasing financial risks of the Phulbari Coal and Power Project being held up or cancelled by the Bangladesh government, and how much would it cost shareholders if all of GCM’s planned mine and power assets are stranded?

Question 3

In 2019, a report published by Bangladesh’s leading Bangla newspaper, Prothom Alo (24/08/2019), revealed that  the company GCM provides false information about Phulbari contract and govt will take legal action and that the government will take legal action against the company. The report by Mohammad Arifuzzaman on August 24, 2019 quoted Bangladesh’s Deputy State Minister for Power, Energy and Mineral Resources, Nasrul Hamid. In commenting on GCM Resources’ contract, Bangladesh’s Deputy State Minister for Power, Energy and Mineral Resources, Nasrul Hamid, stated to the daily Prothom Alo newspaper that:

Even in the absence of an agreement, GCM or Asia Energy is trading shares in London by providing information that coal would be extracted from Phulbari, which is false. The government has taken this into notice. The government is proceeding to take legal action against them.”

He asserted that the Prime Minister Sheikh Hasina’s clear instructions are that the government has no plans to extract coal from Phulbari, and the future extraction of coal would only be considered if any advanced and environmental mining or coal burning technology emerged.

What is your response to this? How are you planning to tackle any potential legal action by the government and any third party from Bangladesh? Does the company hold any valid licence for business in Bangladesh?

Question 4

You are holding this year’s AGM on 25 February but you are pressing forward a policy that excludes the company’s own shareholders. This AGM restrains people from attending the AGM. GCM said that ‘due to the ongoing COVID-19 pandemic, the AGM will be held virtually as a closed meeting with a minimum number of directors and shareholders present, such that the legal requirement to hold a quorate meeting will be satisfied; and no other shareholders will be permitted to access, attend or participate either in person or virtually.’ You said, ‘As a consequence of the current COVID-19 restrictions imposed by the UK Government, shareholders will not be permitted to attend the Annual General Meeting and will only be able to vote by proxy. This year, only the Chairman of the Meeting may be appointed as a proxy.’

Why couldn’t you wait for lockdown to be lifted, and why would you not hold the AGM in spring time? Last year you held the AGM 15 months after the preceding AGM. Why are you rushing this year?

Question 5

We have been hearing that there had been two appeal hearings on the cases against 18 community representatives in Dinajpur on 24 January 2021, and 4 February 2021. What is the outcome of these hearings, and where are the court cases between the company’s CEO Gary Lye and the communities stand now?