Mining Weekly reports that the share price of Rockwell Diamonds leaped by 17% on the JSE yesterday as three of the company’s directors defended the diamond mining company against what they called a “completely unnecessary, cashless takeover” attempt by Pala Investments.

Pala owns 19.9% of the Rockwell shares and attempted an unsuccessful hostile bid for the diamond mining company last year. It had requisitioned a June 17 meeting of Rockwell Diamonds shareholders to vote on the appointment of a new set of directors and end the company's shareholder rights plan. The aim of the latter is to provide protection against hostile takeover attempts.

Pala wants the meeting for shareholders to consider a proposal that Rockwell Diamonds raise the funds it needs through a rights offering to all shareholders in order to avoid potential dilution, which may occur if the company opts to sell shares through a private placement.

Rockwell CEO John Bristow, chairperson David Copeland and director Mark Bristow described the Pala-requisitioned meeting as “completely unnecessary” in view of Rockwell’s annual general meeting to take place in July.

Copeland stated: "We see Pala's proposal to remove the executive directors and to terminate the shareholder rights plan as yet another attempt to control the company – this time, as a kind of cashless takeover.”

Copeland added that Rockwell’s management had been subjected to ongoing attacks by Pala, which was placing considerable strain on the diamond company. He added that the executive directors believe the worst is behind the company and that the step is clearly a continuation of last year’s failed takeover attempt.

Pala’s proposed new set of directors includes former Kumba Iron Ore GM Matie von Wielligh as chairperson, Deloitte & Touche retiree Phillip Reynolds as interim CEO, former Rockwell COO Hennie van Wyk, and African Vanguard’s Sandile Zungu.