The Australian Securities and Investments Commission has launched civil proceedings against resources minnow Padbury Mining and its chief executive Gary Stokes over a botched $6 billion financing deal for the Oakajee port and rail project in Western Australia.
In April last year Padbury, with a market capitalisation of just $70 million, told investors it had found an unnamed wealthy Australian to stump up the bulk of the $6 billion in funding required to resurrect the doomed Oakajee facility.
More than 200 million shares were traded, and the share price more than doubled from 2¢ to more than 5¢.
After several weeks of mystery around the deal, it emerged the financial backer was Alliance Super Holdings, a “private equity” firm in a network ultimately controlled by colourful Sydney entrepreneur Roland Bleyer, a former hair clinic operator.
But by the end of April Padbury told the ASX the deal had been cancelled, and the parties involved had been released from any claims arising from the deal.
ASIC on Wednesday said it had taken action against Mr Stokes along with Padbury’s chairman Terry Quinn and will seek financial penalties against the pair as well as seeking to ban them from managing companies in the future.
ASIC’s case hinges on the failure of Padbury to declare the conditions of the funding deal including a clause that required Padbury to procure $1.3 billion in demand guarantees in three tranches.
“ASIC further alleges that the company was in breach by failing to disclose the identity of the funding providers together with the fact that it had not independently verified the capacity of those providers to provide the funds.”
The proceedings are listed for a directions hearing in the Federal Court in Perth on July 15.
Padbury’s shares have been suspended from trading since December.
Source:- http://www.smh.com.au
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