Riot Platforms, the largest shareholder of Bitfarms, has issued an open letter to Bitfarms’ shareholders, calling for additional changes to the company’s board of directors.
The upcoming shareholders meeting is scheduled for Oct. 29. During the meeting, Riot is expected to push for reforms to improve governance and value for all shareholders.
Bitfarms is a publicly traded company based primarily in Canada that specializes in the cryptocurrency industry, with a particular focus on Bitcoin (BTC) mining.
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Riot’s stake and actions
Riot holds a 19.9% stake in the BTC mining-focused firm and has acknowledged recent changes to the board, including the resignation of co-founders Emiliano Grodzki and Nicolas Bonta.
In the open letter, Riot argues that these changes are insufficient and reactionary to public pressure and proposes the election of two independent directors, Amy Freedman and John Delaney.
The two new independent directors proposed would replace Bitfarm’s board members, Andres Finkielsztain and Fanny Philip.
Related: Crypto Biz: Riot increases Bitfarms stake in takeover strategy
Warning to Bitfarms
In its letter, Riot also warns Bitfarms against taking further actions that could entrench the existing board before the Oct. 29 meeting.
Riot stated that it “sincerely” hopes that Bitfarms will ensure shareholders “have their say” and not “seek to take any steps” that could “adversely affect investors” or gain “unfair advantage in the director election.
“Bitfarms Board should not enter into any financing transaction prior to the completion of the Special Meeting. Riot is deeply concerned that any transaction the current Bitfarms Board will pursue will be punitively dilutive to all Bitfarms’ shareholders when there are other more attractive financing options available.”
Riot warned that if the Bitfarms Board insisted on taking “any such action to further entrench itself at the expense of shareholders,” incumbent directors would be held “personally accountable.”
Related: Riot Platforms boosts Bitfarms stake with $2.28M share acquisition
Bitfarm board shakeup
On Aug. 13, Bitfarms announced the appointment of CEO Ben Gagnon as a new board member amid Riot Platforms’ attempted takeover.
Bonta, who worked as Bitfarms’ interim president and CEO, stepped into the role in May and “decided to step down” from the board upon Gagnon’s entry.
A Bitfarms spokesperson told Cointelegraph at the time that the appointment of a CEO to a board was “standards across public companies.”
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