A fresh dispute is brewing at Polyus Gold after the miner dropped independent director Lord Patrick Gillford as a nominee to the new board, pending an investigation into allegations that he is acting for Interros Group.

Earlier this month, Russian media reports said Gillford was linked to Interros, Vladimir Potanin's holding company, which is battling for control with Mikhail Prokhorov's Onexim Group, the other main shareholder.

Gillford, a former adviser to British then-Home Secretary Douglas Hurd in the 1990s and founding partner of Britain-based consultancy Policy Partnership, has denied the allegations and said he requested an investigation by the company's management into the source of the allegations, not the substance.

"For this to be cynically represented by Polyus … as Lord Gillford initiating an investigation into his status as an independent director is dishonest and wholly unacceptable," Policy Partnership said in a statement.

The debate centers on the role played by Policy Partnership, which provides advisory services to the Potanin Foundation, a philanthropic organization linked to Interros, as well as Gillford's web biography, which says he has done work for Interros. Policy Partnership has also provided services to Onexim Group in the past.

Locksley Ryan, a consultant at the firm, is advising Interros through his RLF Partnership on improving corporate governance at Polyus.

"His partners are benefiting from business relationships with Interros, Onexim and Polyus," Polyus CEO Yevgeny Ivanov said Monday. "It doesn't matter with whom he has business relationships. The problem is that if he has business relationships with our core shareholders, it is difficult to say he is independent."

But Gillford said there was a Chinese wall in place at Policy Partnership and that he has had no involvement in the company's consultancy business with Polyus or the other shareholders.

Ahead of a June 26 annual shareholders meeting, Polyus' management is seeking to install Christophe Charlier in Gillford's place as one of the nine-person board's two independent directors.

It is common practice in Russian companies for board members to represent interests of shareholders, although corporate governance standards are stricter for firms with overseas listings.

Of the current board, three directors are thought to be close to Interros, while four, including Ivanov, are said to be linked to Onexim. Valery Braiko, head of the Russian Gold Industrialists Union, is the second independent.

Gillford has suggested that moves to oust him were sparked by his calls for management to suspend the carve-off of strategic assets held by Polyus Exploration without shareholder approval.

Ivanov dismissed the suggestion Monday, saying Polyus shelved the plan to spin off the exploration assets in March and would not go ahead with the project without full support from the board. To claim the assets were strategic was a "distortion of the facts," he added.

Charlier worked for Norilsk from 2002 to 2004, reporting to then-CEO Prokhorov, raising questions about his distance from the major shareholders.

"You should take a look at Charlier's biography and see whether you think he is more independent than Gillford or less," an Interros spokesman said Monday on condition of anonymity, in line with company policy.

But Ivanov denied that Charlier was close to either of the two main shareholders and said he met the company's requirements for election as an independent director.

"For more than three years, Charlier has had no business relationships with any of the parties involved," he said.

Shares in Polyus skyrocketed last week — only to later plunge — ahead of the deadline for shareholders to hold equity to allow them to participate in the June shareholders meeting. The stock received a further boost from Kazimir Partners' offer for a minority stake at $73.44 per share, a premium to their market value. The shares traded at 1,580.0 rubles ($66.95) on Monday.

Analysts suggested that entities close to Interros and Onexim were buying up stock as Potanin and Prokhorov battle for control over one of their last jointly held assets. The two men have been embroiled in a protracted asset split since early 2007, and both still hold substantial shares in Polyus, a key center of the estranged partners' backroom battles.

According to media reports, Potanin holds around 30 percent in Polyus, while Prokhorov owns 34 percent.