Padbury to launch governance review

Padbury Mining has appointed Steinepreis Paganin to review the company's corporate governance policies in the wake of its failed equity funding deal to construct a port and rail network at Oakajee.

The law firm will implement a training and assessment program for Padbury's management and staff with the objective of ensuring Padbury complies with ASX disclosure and listing compliance processes. 

It expects to complete the program within three months.

The company's shares skyrocketed in a brief window of trade on the ASX last month after it announced had secured a $US6.47 billion ($6.89 billion) funding agreeement for the Oakajee project. 

However the announcement contained no information on the identity of the company's backers or their capacity to provide the funds and the company was soon forced to enter a trading halt.

The ASX raised concerns about the company's compliance with disclosure rules and requested further details of the deal, which was dismissed as unrealistic by many observers, including Premier Colin Barnett.

Padbury later revealed it had struck the deal with entities associated with hair regrowth entrepreneur Roland Bleyer, but the deal soon collapsed.

The company took a battering on the share market earlier this month when it revealed it had terminated the funding agreeement less than three weeks after it was announced.

In its first day of trading after admitting the Oakajee funding deal was dead, Padbury shares fell by a massive 85 per cent to 0.5 cents after opening at 3.3 cents.

Padbury admitted at the time that its funding announcement had not been reviewed by external legal counsel, and said it would implement a review of its corporate governance policies and disclosure process.

The company maintained that it carried out due diligence enquiries on the capacity of the entities associated with Mr Bleyer to meet their funding obligations, and that those entities represented to Padbury that they had access to sufficient capital. 

It remains unclear as to what specifically triggered Padbury to terminate the funding deal, with negotiations between the two parties beginning about 18 months before the deal was announced.

Padbury shares were steady at 0.4 cents at 1:15pm WST.