get rid of them, page-75

"Aka
Timeone may have 19.9% of PLV
But how many shares have their 'friends' got? "

Most of the dumped JP Morgan stock if they are clever !

I posted the link to Mt Gibson on the other thread but below is some of the chronology of events ! Thought provoking gievn the PLV chain of events if nothing else ?




Key events in the chronology
17.In 2005, negotiations between Mount Gibson and Shougang Holding resulted in a Participation Agreement in relation to a slurry pipeline and investment in Asia Iron.8 Ms Shirley Chong (the major shareholder in COL Capital, director of APAC and long-time friend of Mr Lee Ming Tee) was involved although there is some ambiguity about her role.

18.In about June 2006, COL Capital (12.72% shareholder in APAC) twice requested the appointment of Mr Alan Jones to the Mount Gibson board, then it sought the appointment of Dato John Wong. On 12 June 2006, COL Capital requisitioned a general meeting (under section 249D) to consider the appointment of Dato Wong. Subsequently Mr Jones was appointed and the requisition for Dato Wong was withdrawn.

19.On 6 October 2006, Mount Gibson received nominations from RIM Capital (0.18% shareholder in Mount Gibson) and Argyle (1.3% shareholder in Mount Gibson) for consideration at its upcoming AGM9 for the election of Mr Robert Willcocks and Mr Kin Chan. The nominations were received within approximately an hour of each other.

20.There were conversations about the possible withdrawal of these nominations but they proceeded to a vote. Mr Jones contacted Mr Lee about them. Mr Jones said that he contacted Mr Lee because of Mr Lee's friendship with Ms Chong and his better command of English.10 Later Mr Jones called Mr Tonkin and/or Mr Rule (Mount Gibson) and said that "The Chinese are not willing to withdraw the nomination of Willcocks."

21.On 30 November 2006, Mount Gibson held its AGM. Shougang Holding (through Timely Rich) and COL Capital gave their proxies to Mr Michael Bogue (Managing Director of RIM Capital and former director of APAC) who, it appears, voted the shares in support of the nomination and in the same way as APAC voted. The nomination was nevertheless lost on the vote. The votes cast by Mr Bogue were against the votes of nearly all non-associated Mount Gibson shareholders. They were also against the unanimous board recommendation.

22.In early 2007, Shougang became interested in taking iron ore offtake from Mount Gibson. Ms Chong asked Mr Jones if he could assist. The Panel inferred that, in contacting Mr Jones, Ms Chong had acted on behalf of Shougang.11

23.Also, in late 2007/early 2008, APAC expressed an interest in securing offtake from Mount Gibson, through Mr Liu.12 Mount Gibson advised Mr Jones that it would be reluctant to supply offtake to APAC because it was an unknown trading entity.

24.On 26 April 2007 Mr Cao Zhong (Managing Director of Shougang and Shougang Holding and Assistant General Manager of Shougang Corporation) was appointed an executive director of APAC. He had been invited to join the board by Mr Yue Jialin (a shareholder in APAC through Profit Harbour). On 3 May 2007, Mr Cao became Executive Chairman of APAC.

25.The Hong Kong meeting. On 12 June 2007, Gazmetall (Messrs Moshiri, Efendiev, Mitrofanov and Mark Horn - its adviser) and APAC (Messrs Cao, Jaime Che and Liu) met in Hong Kong. Mr Lee also attended. The meeting was described as "social" although at this meeting Mr Lee asked Gazmetall to invest in APAC. A file note13 was made, after the event, by a junior employee of Metalloinvest (holding company of Gazmetall). According to that note, at the meeting:
a.Mr Lee made a presentation on the investment fund of APAC, which owned 19% of Mount Gibson, and "on the major shareholder in APAC Resources which was Shougang Corporation".

b.Mr Lee talked about the possibility for the Metalloinvest group to become a shareholder in the APAC Resources fund.

c.The reasons for APAC's investment in Mount Gibson was recorded in the following way: " … mainly for the purpose of becoming the first Chinese company which would have a major stake in the fastest developing company among all Australian iron ore companies. The intention was that by the time the governing Communist Party of China would issue a directive to invest in foreign iron ore companies, APAC Resources would have the advantage of being the first player on that market."

d.Mr Lee expressed the following concerns about the current situation with Mount Gibson:
i.Mount Gibson's sales policy was inefficient. In Mr Lee's opinion, Mount Gibson should sell all its offtake to Shougang14 and Shougang was ready to buy it. Mr Horn responded that during negotiations Shougang had offered rather low prices.

ii."Major shareholders in Mt Gibson (i.e. the Chinese and the Russians) must act as one major shareholder and must coordinate their actions with regards to Mt Gibson." Mr Horn responded that there were Australian legal issues about doing this.

iii.Mount Gibson must concentrate on decreasing production costs.
iv."The representative of either Russian or Chinese party should become Chairman of Mt Gibson."
v.When the management is too independent it is working largely for itself.

26.The impact of this meeting appears to have reverberated for some time. For example, Mr Horn notes in an email to Mr Tonkin on 15 June 2007 that he thought the APAC representatives and Mr Lee were "interesting" and he would have to mediate carefully to ensure there were no problems. And on about 15 September 2007 when Mount Gibson (Mr Neil Hamilton) met Gazmetall in London (Messrs Horn, Moshiri and Mitrofanov), Mr Hamilton recalls a conversation in which Mr Moshiri expressed suspicion about APAC's intentions in relation to Mount Gibson.15

27.In September 2007 Mr Jones made arrangements to meet Mr Liu (CEO of APAC) and the Mount Gibson Chairman (Mr Neil Hamilton) at the offices of Allied Group. Mr Jones stated that, because Mr Lui had poor English, he arranged for Mr Lee to attend as a translator for Mr Liu.16 In the event, Mr Liu did not attend. However, Mr Lee still attended.

28.During October 2007, although Mr Horn was Gazmetall's adviser responsible for selling its Mount Gibson shares, Credit Suisse became involved on Gazmetall's behalf and discussed the sale of Gazmetall's shares with potential buyers.

29.One of those potential buyers was Shougang Holding (PRC).17 On 7 October 2007, Credit Suisse discussed the sale of the parcel with Shougang Holding (PRC). Mr Cao was present during that discussion. Apart from Shougang Holding (PRC), Credit Suisse contacted two other buyers. They were apparently unrelated entities to either Shougang or APAC.

30.At around this time, Mr Horn received a call from Mr Jones who said that he had heard that Gazmetall may be interested in selling its stake in Mount Gibson and that APAC may be interested in buying it. Mr Horn stated in submissions that he did not know how Mr Jones was aware Gazmetall was interested in selling its stake.18 He also stated that Mr Jones had said that APAC might be interested in purchasing the stake. Mr Horn therefore arranged to meet APAC on 24 November 2007 (the Beijing meeting).

31.Also, around this time APAC conducted an analyst briefing at which Mr Cao was present. Mr Cao commented on APAC's target market. Shougang Holding was described as a "cornerstone" shareholder in APAC.

32.The Beijing meeting. On 24 November 2007 APAC (Messrs Cao and Che and Ms Chong) met Gazmetall (Messrs Moshiri, Horn and others) in Beijing. Mr Lee attended. Mr Cao raised the idea of Gazmetall selling its stake to APAC in exchange for shares in APAC. Mr Cao stated in submissions that he did not take this share swap proposal seriously. Mr Horn did not respond directly to the proposal because he was in discussions with other parties about the sale of the shares.

33.That evening, Mr Horn attended a dinner with Shougang representatives including Mr Cao. No business was apparently discussed.

34.On about 5 December 2007, Mr Horn telephoned Mr Lee to inform him that Gazmetall had decided to sell to another buyer. In early January 2008, it became evident that the sale to this unrelated purchaser would fall through.

35.The Koolan Island visit. On about 10 December 2007 Mr Jones arranged a visit to Koolan Island, Mount Gibson's mine site outside Broome, WA. On 3 December 2007, Mr Che had emailed Mr Tonkin regarding visas. He identified the APAC representatives, which did not include Mr Jones or Mr Lee.19 Mr Tonkin, with whom Mr Jones spoke to make the arrangements, regarded the visit as being for APAC representatives.20 Mr Lee, however, was included as one of the guests. APAC submitted that Mr Lee attended because he (Mr Lee) was in Australia anyway and was Mr Jones' guest because of his (Mr Lee's) interest in engineering solutions.21 Mr Jones denies telling Mr Tonkin that Mr Lee represented APAC.22 As events transpired, when the visit did take place, on 19 December 2007, Mr Jones did not attend for health reasons. However, there is no evidence that he sought to cancel or rearrange the visit by Mr Lee.23 It appears that none of the APAC representatives that Mr Che identified attended.24 Mount Gibson submitted that it would not have allowed Mr Lee to visit the mine site, but for believing Mr Lee was attending as a representative of APAC, one of its then large shareholders.25

36.On 18 December 2007, prior to the Koolan Island visit, Mr Tonkin had dinner in Broome with Mr Lee and his son. During that dinner, Mr Lee is reported to have said that:26
a.he had met with representatives of the "Russians" and Gazmetall's stake in Mount Gibson was for sale at about $2.70 per share;
b.he was interested in Gazmetall's stake;
c.his companies liked to control entities but not necessarily own them outright; and
d.he would like to place Gazmetall's stake with "friends".

37.On 19 December 2007, Ms Chong acquired 300,000 shares in Shougang (being 0.0043% of Shougang's issued capital).27

38.On 19 December 2007 Mr Lee visited Koolan Island.

39.In the first two weeks of January 2008, Shougang Holding (PRC), having decided earlier not to purchase Gazmetall's Mount Gibson shares, suggested to Mr Cao that he contact Mr Horn if Shougang (ie, the Hong Kong listed entity) might be interested.28 Shougang was therefore aware that the stake was back on the market.
40.The London meeting. On 11 January 2008 Gazmetall (Messrs Horn and Moshiri) met with Mr Lee and Ms Chong (accompanying Mr Lee) in London. The meeting was arranged by Mr Lee, on about 23 December 2007 (four days after his Koolan Island visit) as a "courtesy visit".

41.On about 14 January 2008, Shougang contacted Mr Horn regarding Gazmetall's shares in Mount Gibson and arranged a meeting. Whether there was one call or two, and whether Mr Cao called or another Shougang representative called, is unclear.29 Mr Horn stated that he asked for confirmation about legal impediments to Shougang purchasing Gazmetall's shares and, specifically, about Shougang's relationship to APAC, as he was concerned to protect the interests of his client.30

42.On 18 January 2008, Shougang (Mr Cao and Ms Carmen Cheng) met Gazmetall (Mr Horn) in Hong Kong.31 The sale to Shougang of Gazmetall's shares in Mount Gibson was the only business discussed and it was agreed at $2.60 per share.32 Mr Horn subsequently liaised with Ms Carmen Cheng (Company Secretary of Shougang) to settle the terms.

43.On 22 January 2008, Mr Cao discussed the principal elements of the deal with other Shougang directors at a remuneration committee meeting.

44.On 25 January 2008, the directors of Shougang were e-mailed with details of the proposed acquisition, Mount Gibson's 2007 annual report, Mount Gibson's most recent quarterly activities report and information regarding the trading prices of Mount Gibson shares for the previous 60 days.33 The email, by Ms Cheng, stated "as previously reported by Mr Cao Zhong to the Board, Shougang International is going to acquire an aggregate of 19.76% shareholding in [Mount Gibson]…."

45.On 28 January 2008, Mr Horn informed Mount Gibson of the proposed sale by Gazmetall.

46.On 30 January 2008, Shougang's board approved the Proposed Transaction. Directors were provided with a memorandum setting out details of the proposed acquisition and board resolutions, the latest drafts of the Share Purchase Agreement an Option Agreement and a draft announcement to the Hong Kong stock exchange.34 The email by Ms Cheng states: "Please note that the management intends to enter into the agreements with Gazmetall by tomorrow…. If the board resolutions are agreeable to you, please sign on the resolutions by noon tomorrow and thereafter return the resolutions to me." Some questions were asked by directors before authorising entry into the agreements.35

47.On 31 January 2008, agreements were entered into and an announcement of the transaction made. The announcement stated the reason for the transaction was "to secure a long-term and stable source of supply of raw materials for the Group's steel manufacturing operations".