WILLIAM Forge and Peter Clark have been found guilty by a jury in the WA District Court and sentenced on charges of making improper use of their positions as company directors.
Mr Forge was sentenced to two and a half years imprisonment to be released after serving 12 months upon entering into recognizance release order for the period of 12 months in the sum of $10,000.
Mr Clark was sentenced to 18 months imprisonment to be released after serving nine months upon entering into a recognizance release order for a period of 12 months in the sum of $10,000.
The charges were brought by the Australian Securities and Investments Commission and prosecuted by the Commonwealth Director of Public Prosecutions and arose from a number of resolutions made at a directors meeting of Hallmark Gold NL in October 1998.
ASIC alleged that the prime purpose of the resolutions was to remove cash from Hallmark for the benefit of third parties known to Mr Forge and Mr Clarke.
An ASIC investigation found that as a result of the resolutions Hallmark:
Executed a retainer agreement with consultants Davis Samuel for $350,000 a year for three years;
Purchased 8.2 million Kanowna Lights NL options for $656,000;
Purchased 3.6 million Kanowna shares for $720,000; and;
Entered into a contract with Kanowna to exercise the Kanowna options for $1,640,000.
Hallmark purchased the Kanowna options at a premium of more than 300 per cent and the shares at a 100 per cent premium.
The owner of Kanowna shares was CTC Resources NL, of which Mr Forge was a director, and the owner of the options were companies connected to Davis Samuel.
ASIC further alleged that the agreement entered into with Davis Samuel was to the detriment of Hallmark.
ASIC deputy executive director of enforcement Mark Steward said the commission would not hesitate to bring cases before the court where there was evidence that directors had misused their positions.
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