MINING explorer Admiralty Resources has been hit with a shareholder lawsuit over its sale of an iron ore project to a mysterious company registered in tax haven the British Virgin Islands.
Slater & Gordon has today confirmed that it is investigating the company on behalf of one of its shareholders.
Slater & Gordon litigation lawyer Ben Phi said the firm had commenced legal action on behalf of shareholder David Hanks. He is seeking orders forcing the company to hand over documents relating to the $4 million deal last year and its rejection of a $6 million offer from a rival bidder.
The firm’s investigations are centred on Admiralty Resources’ sale of the Chilean tenements to Icarus.
“Our client is concerned that Admiralty shareholders were not appropriately informed about the competing offer for the Chilean assets when they voted to approve the sale,” Phi said.
"He has repeatedly requested that Admiralty provide information about the due diligence that it conducted before recommending Icarus' offer as superior. Each request has been ignored or denied.”
Phi said the legal action was an example of an individual shareholder challenging an Australian listed company on its corporate governance, when the corporate regulator declined to do so.
"Listed companies have responsibilities to their shareholders and our client has the right to have his questions about this transaction and sale answered,” he said.
"Our client is applying for access to books and records that would finally shed some light on the reasoning behind the company’s actions.”
The shareholder told BusinessDay: "I want the truth."
"If there's nothing to hide all you have to do is say, 'David, come and have a look at the books, you're welcome'."