The dispute between Burrup Holdings managing director Pankaj Oswal and the company's 35 per cent shareholder Yara Australia has escalated after Burrup blocked an independent audit of its financial accounts.
The dispute between Burrup Holdings managing director Pankaj Oswal and the company's 35 per cent shareholder Yara Australia has escalated after Burrup blocked an independent audit of its financial accounts.
In a statement, Yara said it had sought to exercise its right as a major shareholder of Burrup to carry out the audit.
It has responded by commencing legal action against Burrup Holdings Ltd and its wholly owned subsidiary, Burrup Fertilisers Pty Ltd.
Yara said it wants to undertake the audit because of concerns about the failure of Burrup to prepare and file financial reports, and the high cost levels within Burrup which remain unexplained.
It also noted the "persistent lack of transparency and appropriate adherence to corporate governance principles by the Company's Chairman and Managing Director, Mr Pankaj Oswal".
Yara also cited "serious allegations raised by the media of the misuse of Burrup funds and the failure of the company to provide an adequate explanation".
Last month, Fairfax newpapers alleged funds from company were used to pay the bills of a shipping company related to its founder Mr Oswal.
There were also allegations an invoice for Mr Oswal's Maruti Shipping was reinvoiced to the jointly owned Burrup Fertilisers.
Burup is reportedly seeking to convert its status from a public company to a proprietary company, which normally reduces reporting obligations.
"Yara is disappointed with the denial of its rights under the Burrup shareholders deed," said chief financial officer Hallgeir Storvik.
"We have followed due process in our efforts to gain access and will not be deterred in exercising our rights to ensure Burrup is subjected to appropriate levels of accountability.
"This action is being taken in the interests of Burrup and is designed to get to the bottom of what exactly is happening inside the company.
"A situation where a public company has failed to prepare and file a financial report within the time prescribed is intolerable and we will vigorously pursue our rights.
"In the meantime we would urge Burrup to cooperate in the process. Mr Oswal's recent attempts to frustrate, delay and divert attention from these matters of substance needs to end," Mr Storvik said.
Yara has lodged an application with the Federal Court of Australia seeking an order requiring Burrup to allow the inspection.
In a statement on Thursday, the Burrup companies denied that not allow Yara access to the company's books was false and misleading.
"On November 2, 2010 Burrup gave its consent for a Yara auditor to look at its books this Monday November 15 in Perth," the statement said.
"That consent remains notwithstanding that Yara's request was in contravention of the process laid down in the joint venture agreement."
Chairman of Burrup, Pankaj Oswal said "I am flabbergasted and puzzled by Yara's actions given it already has permission."
