Hedge fund TPG-Axon Capital, one of SandRidge Energy’s largest investors, continues to push for changes at the Oklahoma City-based exploration and production company, calling for the replacement of SandRidge’s entire board of directors.

TPG-Axon also said it has filed a lawsuit in Delaware Chancery Court challenging the amount of time SandRidge gave shareholders to vote on proposed changes to the company’s bylaws that were proposed by the hedge fund.

“Obviously, the company is fearful of allowing the voice of shareholders to be heard,” TPG-Axon said in a Dec. 24 letter to the SandRidge board of directors. “Rather than attempt to reform, management and the Board seem intent on various tricks and artifice in an attempt to gather advantage and confuse the process.”

Last month TPG-Axon called for SandRidge to replace CEO Tom Ward, realign its board of directors and consider the possible sale of the company. TPG-Axon, which owns more than 4.5% of outstanding SandRidge shares, said it invested in the company because “the stock represents extraordinary value,” with a $12-14/share range “realistic and achievable.” But SandRidge stock “has been a disastrous performer,” declining 76% from its initial public offering five years ago, TPG-Axon said.

Last week SandRidge agreed to sell its Permian Basin portfolio for $2.6 billion in cash to privately held Sheridan Production Partners II, a sale that had been anticipated since early November (see Shale Daily, Dec. 21). The Permian Basin sale is considered key to SandRidge’s planned strategic transition from a natural gas producer to an oil explorer, and “is a great outcome for our shareholders,” according to Ward.

But according to TPG-Axon, the sale and the market’s response to it provide further evidence that shareholders have lost confidence in SandRidge’s leadership.

“Despite the fanfare with which you announced it, the result was yet another sharp drop (5%) in the stock price,” according to TPG-Axon’s letter. “Why? We believe it is because investors fear that any cash the company receives will be taken or squandered by Mr. Ward.” According to the hedge fund, Ward and a family member “actively compete with the company…[and] have engaged in persistent front-running of the company” through Edmond, OK-based private investment company WCT Resources.

Last month SandRidge adopted a rights plan to counter any offers to take over the company that management deems to be unfair to investors. The company said the rights plan was “designed to assure that all of SandRidge’s stockholders receive fair and equal treatment in the event of any proposed takeover of the company, to guard against tactics to gain control of SandRidge without paying all stockholders a premium for that control, and to enable all of SandRidge’s stockholders to realize the long-term value of their investment in the company.” Under the rights plan, SandRidge will make a distribution of one preferred share purchase right for each outstanding share of common stock of the company to stockholders of record on Nov. 29. The rights generally will become exercisable only if a person or group acquires beneficial ownership of 10% or more of SandRidge common stock.

SandRidge recently announced a 3Q2012 net loss applicable to common stockholders of $184 million (minus 39 cents/share), compared with net income of $561 million ($1.16/share) in 3Q2011.