Australian Federal Police (AFP) investigating mining firms over conduct
Police raids jeopardise Findlay's grip on Golden West bid work

Australian Federal Police (AFP) investigating mining firms over conduct

Nick McKenzie
February 2, 2008

SEVERAL Australian mining companies and executives are under investigation over alleged misconduct and dubious practices in the developing world, sparking calls for greater oversight.

With local firms increasingly scouring mineral-rich developing nations to capitalise on the mining boom, federal police assistant commissioner Peter Drennan told The Age that only the naive would believe that corruption did not sometimes happen. He stressed the majority of Australian firms operated within the law.

Assistant Commissioner Peter Drennan

The Age has learned that the AFP [Australian Federal Police] has three ongoing investigations into mining-related companies. It has finalised inquiries into four other companies after finding insufficient evidence to sustain criminal charges.

A Philippines criminal case has also been revived against two Australians charged in 1996 with breaking environmental laws in connection to the country's worst mining disaster.

After a decade of legal and political wrangling, two Filipino public prosecutors were recently appointed to begin legal proceedings against Australians John Loney and Steven Reid, who held senior positions with Canadian firm Placer Dome — since taken over by Barrick Gold — that managed the Marcopper mine on the island of Marinduque. The island remains heavily polluted after a mine dam burst in 1996.

Mr Reid, who works for another Canadian mining firm, Goldcorp, and Mr Loney, who works for Australian Mineral Fields, did not return The Age's calls or emails but have previously denied wrongdoing.

The Greens, Democrats and Oxfam Australia have called for the Federal Government to examine setting up a mining watchdog in Australia. Oxfam has alleged corruption of local officials, intimidation of dissenters and environmental damage from some projects.

In the Philippines, several Australian firms employ local government officials, despite their role in approving permits.

The CEO of Melbourne-based miner OceanaGold, Stephen Orr, defended his company's employment of village councillors from Didipio, in the northern Philippines, where a $174 million gold and copper mine will begin production next year. "Some people have a lot to offer from a public official standpoint … and they also happen to be exceptional employees."

He dismissed claims of Oxfam Australia that OceanaGold had intimidated villagers refusing to sell their homes and tacitly encouraged the involvement of armed soldiers in the case of a resident who ignored legal orders to vacate her house.

But The Age has confirmed that an employee of Australian company Climax Mining, which held rights to the Didipio mine until it was bought by OceanaGold in 2006, made an irregular land offer to an anti-mine local councillor in the late 1990s, before a council vote to endorse the mine.

Meanwhile, relatives of more than 100 Congolese villagers killed and injured during the military suppression of an uprising in October 2004 have lodged a Supreme Court application in Western Australia for access to any Anvil Mining documents that shed light on support given by the company to the military. The application is due to be heard late next month.

Anvil Mining has denied any wrongdoing.

SOURCE: http://www.theage.com.au/
http://www.theage.com.au/investigations

Police raids jeopardise Findlay's grip on Golden West bid work

Kevin Andrusiak | February 02, 2008

THE Australian Federal Police raid on the office of Findlay Securities and two of its senior staff have cast further doubt on its work in backing the Fairstar Resources all-scrip bid for Golden West.

AFP officers are believed to have seized computers and documents from Findlays and the homes of director Robin Armstrong and senior trader Jeremy Slater on Thursday amid market rumours that the police will look at their share trading in both companies.

Fairstar, led by quarry manager Kevin Robertson, has been rejected numerous times by Golden West.

It says the all-scrip offer of seven Fairstar shares for one Golden West share is inadequate.

Golden West, chaired by iron ore industry doyen Geoff Wedlock, controls the lucrative Wiluna West iron ore project in the WA outback and shares a similar share register with Fairstar and adjoining offices in Perth.

Both companies have similar share registers and office space in Perth and have been backed by Kalgoorlie driller John Doutch.

A further complication this week was the surprise revelation by Golden West major shareholder Dubai-based Falak Holdings that it had "accidentally" sold its 8 per cent stake into the Fairstar bid, which took Fairstar to a holding of 33 per cent.

Falak had promised it opposed the bid and had initiated an extraordinary general meeting to remove three Golden West directors: Con Markopoulos, Alan Rudd and Mick Wilson.

The meeting was originally scheduled for Tuesday but was been postponed to February 19 when Golden West won its application to the Takeovers Panel to investigate the share transfer.

Falak has instructed lawyers to seek the return of the shares from Fairstar ahead of the meeting.

Neither Mr Markopoulos nor Mr Wilson returned calls from The Weekend Australian and Mr Rudd, who is also on the Fairstar board, could not be contacted for comment.

It is understood, however, that Mr Markopoulos recently met Falak representatives in Dubai and was accompanied by Matt Tomas, a business partner of Melbourne underworld figure Dominic (Mick) Gatto.

The raid on the Findlay offices added to doubts about its backing of Fairstar's bid, which has been weighed down by funding issues.

Mr Armstrong declined to comment last night.

Findlay had promised to underwrite the bid before recent falls on the Australian share market triggered a get-out clause.

It is unclear if Findlay has decided to walk away, and Fairstar managing director Kevin Robertson confused the issue further on Thursday when he said the Fairstar board believed the underwriting obligations were still in play.

However, he told the Australian Securities Exchange, "Fairstar understands that Findlay does not support this view".

Through a third party, Mr Robertson said yesterday that he believed Findlay would meet its obligations.

Fairstar would need to raise upwards of $40 million to complete the deal, well above its current market capitalisation of $30 million, while Findlay is desperate to receive the generous fees attached to the deal.

Golden West and its advisers are believed to have made new approaches, without response, to Fairstar to clear up the funding arrangements, and may make a third application to the Takeovers Panel to resolve the issue.

Fairstar posted a loss of $1.85 million for the six months to the end of December and is burning cash at the rate of $1 million every three months to fund the takeover bid.

According to its latest quarterly announcement, Fairstar expects to spend $500,000 exploring its various tenements in the current quarter.

Its bank balance stood at $1.47 million on January 1.

SOURCE: http://www.theaustralian.news.com.au/

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