Whether you’re a passionate environmentalist against digging huge holes in the ground or a lithium miner whose livelihood depends on the minerals lying beneath our ground there is one thing we should agree on - we are a lucky country for having such an abundance of mineral resources. We must also certainly agree these resources are ours and if some foreign entity wants access to them we must ensure Australians are adequately compensated for the loss of their mineral wealth.
Adani is an example of the Australian people not trusting big business or the Australian politicians that support these foreign entities. A large number of Australians have protested against Adani because they believe that the Great Barrier Reef will be damaged by the coal operations they are now proceeding with, and that coal projects are widely acknowledged as contributing to global warming. Authorities have not heeded their concerns and have focused instead on the money Adani brings to the table despite the destruction to the environment their operations will cause.
If there was trust between the people, the government and big business there would be no reason for the protest but that fabric of trust has been broken by numerous corruption scandals involving big business and government. This includes the Murray Darling corruption scandal involving numerous federal politicians which also resulted in large scale destruction of our Environment.
The Adani case is of environmental concern but when you probe further, there is also the issue of Australian mineral resources being taken over by stealth by foreign entities. And in the process they use deceit and under-handed methods. Usually, few people are not any the wiser and that is because of a lack of transparency that usually surrounds all aspects of their dealings.
Prior to 2019 the New Zealand company Todd Corporation gained majority control over the ASX listed company Flinders Mines. After gaining control they put their directors on the board and the Company then put out numerous announcements that their iron ore reserves were worthless because they were essentially low grade and stranded.
Over a period of several years, the share price crashed from 15c down to 1c and then languished. A ‘low-ball’ bid proposal by Todd Corporation that was supported by the Flinders board was then put to shareholders late 2019. The bid was rejected even after the offer by Todd Corporation was increased. The failed bid was then followed by a move by the Board in late December 2019 to have the company offically delisted by the ASX. It would mean that the Company would become private.
Subsequently, shareholders found out about backroom deals that had taken place with a company affiliated with Todd Corporation, the WA State Government and a Chinese company. The deal involved infrastructure being set up to mine the iron ore assets that belonged to Flinders Mines. It became obvious why there was a push by Todd Corporation to secure 100% ownership over Flinders Mines through the bid proposal, and failing that, to disenfranchise retail shareholders through a de-listing.
Shareholders mounted a very public campaign involving an application to the takeovers panel and appeals to the regulator to protect their rights. The campaign resulted in the de-listing proposal being blocked. The directors have since changed their tune. No longer do they refer to the company’s iron ore assets as stranded deposits, but rather, they are flagging a multi-billion dollar project that they want to mine while still striving to push through proposals that retail shareholders find Unacceptable.
A similar situation is now playing out in another ASX listed company in Western Australia called Legacy Iron Ore. This situation appears to be even more sinister than the Flinders Mines example. The takeover by stealth was being pushed onto shareholders during the recent Christmas/New Year period; a traditionally quiet period where many shareholders are preoccupied with Xmas celebrations and holidays.
The proposal involved the acceptance of a placement offer from the Company’s largest shareholder. The placement would lift their holding from 78% to 95% and it would then enable them to compulsorily acquire 100% of the Company. The placement diluted the company’s share structure by a massive 500% thereby disenfranchising all other shareholders.
The takeover proposal breached several ASX listing rules, and surprisingly, the Company Secretary was an ex-ASX compliance officer who would have been well versed in the listing Rules.
Despite many breaches by the Company, too numerous to mention in this article, the company then requested Foreign Investment Review Board (FIRB) approval of the transaction. Importantly, the decision made by the FIRB relied on false documents the Company had provided to the ASX and which had been announced to the market.
FIRB approval was granted 8 days afterwards, just two weeks before Christmas. The same Foreign Review Board also accepted the takeover of Australia’s billion-dollar baby food formula company, Bellamy’s Australia, by a Chinese company. The takeover offer came when the Bellamy’s share price was at a low point following a share price crash. The crash coincided with changes to Chinese government policies which were detrimental for exports of Bellamy’s product to China. And then then low prices were maintained after the crash through a heavily manipulated share price.
During and following the share price crash, broker trading algorithms ensured that artificial prices were set and maintained up until the bid wasannounced. It meant that shareholders had to make decisions whether or not to accept the takeover offer on the basis of a grossly manipulated, low share-price.
Several politicians reacted to the Bellamy’s takeover and they seemed to be aware that the entire process was orchestrated. It was clearly designed to allow a foreign entity to acquire valuable Australian food assets on the cheap. Public outage brought together politicians from opposing parties including Whish Wilson from the Greens, Hanson from One Nation, Joyce from the Nationals and the two independents Lambie and Wilkie. For once they were all united in their opposition to the Bellamy’s takeover and so they should be, but what is disappointing is their lack of follow through. No-one has been prepared to follow up on the criminality that is evident in Bellamy’s trading.
What is urgently needed is for Australian citizens from all sides of the political spectrum to put pressure on our politicians. The recent Royal Commission has shown that only public outrage stands a chance of ensuring that our interests are looked after when predators circle and ply their trade. We need to demand through our elected representatives that the nations regulators do their job. They need to intervene and act in Australia’s best interests by enforcing laws and stopping unfair takeovers by stealth. Currently, the situation represents theft on a grand scale where laws are simply ignored and where authorities are prepared to look the other way. WakeUp Australia!