Activist investor Elliott Management has released a letter sent to its founder Paul Singer by the ousted chief executive of US engineering group Arconic that it claims was a veiled attempt to “intimidate or extort” the hedge fund veteran over his celebrations at the 2006 World Cup.
New York-based Elliott is the largest shareholder in Arconic and has been locked in a battle with the US engineering group over the direction of the company. The fund had sought to oust chief executive Klaus Kleinfeld, arguing the company has underperformed other industrial groups under his tenure.
Mr Kleinfeld stepped down this week as chairman and chief executive after the company’s board decided he had shown “poor judgment” in writing the letter, which was sent last week.
The letter is vague in making allusions to events at the World Cup and written at times in ungrammatical English.
“Quite a few people who accompanied you in Berlin in 2006 during and especially after the many matches you attended are still full of colorful memories about this obviously remarkable time; it indeed seems to have the strong potential to become lastingly legendary,” Mr Kleinfeld wrote in the letter, according to a copy released by Elliott.
He apparently sent the letter along with an official match ball of the Fifa World Championships that year as “a token of my appreciation to learn about this completely ‘other side’ of you”.
“P.S.,” Mr Kleinfeld wrote. “If I manage to find a native American Indian’s feather headdress I will send this additional essential part of the memories. And by the way: ‘Singing in the rain’ is indeed a wonderful classic — even though I have never tried to sing it in a fountain.”
Elliott responded in a letter to Arconic’s board that it was “an irresponsible and inappropriate communication.”
“While much of what it says doesn’t make sense, we do understand Dr Kleinfeld to be making veiled suggestions that he might intimidate or extort Mr Singer,” the activist investor said in the letter.
German-born Mr Kleinfeld, who formerly led industrial group Siemens, had previously had the support of the Arconic board during its battle with Elliott.
He became the chairman and chief executive of the aerospace parts maker Arconic following its spin off last year from Alcoa, the aluminium company that he had led since 2008.
Elliott Management bought up a large stake in Alcoa ahead of the spin off, giving it shares in both companies, and subsequently began a campaign to press Arconic to remove Mr Kleinfeld from his position, arguing that “current management’s persistent failure . . . has destroyed…