11/04/2012 - 09:46

Chaney backs Mindax holders in fight

11/04/2012 - 09:46

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Chaney backs Mindax holders in fight

Prominent Western Australian businessman Michael Chaney has joined shareholders of iron ore hopeful Mindax in returning fire on a pair of directors at the company seeking to oust two fellow board members.

Andrew Tsang, director and major shareholder of Mindax, last month led calls for managing director Greg Bromley and director Ken Pettit to be removed from their roles after the company signed a heads of agreement with Japan’s Sumitomo worth up to $115 million.

Mr Tsang, and director Benjamin Chow, indicated they were opposed to the agreement, which was aimed at fast tracking the Mt Forrest iron ore project in the Yilgarn region.

The directors filed a requisition notice requesting a meeting to vote on the removal of Mr Bromley and Mr Pettit from the board, and be replaced by geologist and mining engineer John Stacpoole.

In turn, a requisition notice for a meeting for the removal of Mr Tsang and Mr Chow from the company’s board has been filed by the group of shareholders.

Mindax is not the first company to be in the situation of a potential boardroom spill following the announcement of a deal involving investment into the company.

WA explorer Central Petroleum is in the middle of a board dispute that has accompanied the company’s decision to undertake an $11 million capital raising.

However, most companies in this position do not have the high-profile backing of the likes of Mr Chaney, who is chairman of National Australia Bank, Woodside Petroleum and Gresham Partners. In support of Mr Bromley and Mr Pettit, Mr Chaney described Mindax as a well-managed company with good prospects of developing its Mt Forrest iron project and exporting through Esperance.

“The call to sack MD Greg Bromley and director Ken Pettit has not been explained to the market at all and risks jeopardising the project,” Mr Chaney, who owns 1 million shares in Mindax, said in a statement to WA Business News.

“Chairman of the Yilgarn Iron Producers Association, Greg is an experienced geologist adept at negotiating port and rail agreements, while Ken is a top senior counsel and chairman of the Port Hedland Port authority.

“The replacement director put forward by Mr Tsang is relatively inexperienced.” 

Under the proposed deal, Sumitomo would pick up a 45 per cent stake in Mt Forrest by funding a $15 million feasibility study, while holding the option to pick up a further 24 per cent interest by spending up to $100 million on the project’s development.

David Utting, director of Mindax shareholder Momentum Minerals, said the iron ore hopeful faced being taken over by a “shadowy” Sydney-based syndicate and possibly warehoused and administered from the east coast if the directors were successful in removing Mr Bromley and Mr Pettit.

“The unexplained move by Andrew Tsang to sack two such talented directors leaves the company without balance and expertise required to move its project forward,” Mr Utting told WA Business News.

He said the “anti-Japanese deal coup … has been launched with no reasons and no benefits to the company spelt out either publicly or in submissions to the ASX”. Shareholders are due to vote on the transaction at a yet to be scheduled meeting, before May 18.

Mr Tsang, who is an Australian citizen born and educated in China, could not be contacted before WA Business News went to print.

He is described on the Mindax website as a self-made, dynamic business entrepreneur, who has successfully established and run construction, engineering and property development businesses in China and Australia.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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