Jantimot, I think you hit the nail on the head this time. It is now common knowledge that Sinosteel were the instigators of WM being removed. I did not realise that the 16th April 2016 report you mentioned that CDU had agreed not to make any claim against Sinosteel for the process plant under their guarantee. Well, Jantimot you have found the piece of the puzzle. I am aware of WM having a claim ready for Sinosteel to the tune of around +$50m in claims under the purchase and construction deal for the process plant. Remove WM and the claim evaporates. The put in another Chinese person as Managing Director and their goes the claim, this is genius at work.How could CDU agree not to pursue the claims and the penalties under the contract? I would have thought this would have been a Board approval process and reasons that the losses and damages on behalf of shareholders could not be pursued. I do not think anyone else picked upon this announcement. To do this hinges on a criminal act. Someone has some explaining to do.
1. Get rid of MD who is about to launch a +$50m claim.
2. Employ another Chinese as MD.
3. Have CDU's new MD agree not to pursue the terms of the contract for losses, damages and penalties and guarantees against Sinosteel. Considering the plant is 3 years behind can imagine what the penalties would be apart from the damages and losses.
4. Once agreement not to pursue Sinosteel is completed, sack the new MD who turned out to be a cream puff with no real experience.in hands on operations or commissioning.
5. The appoint the Sinosteel rep as the COO tomake sure no claims are pursued.
6. Bravo. Maybe this was the real day the music died.
I believe that there is a real case to be answered and possible cause for an action against the Board and or the person or persons that allowed this to happen.
The contract is the contract and only changes that are in the best interest of the company in this case CDU should be allowed to take place. I can guarantee that no legal opinion was sought or any real investigation into the consequences of this action.Just let them out of their contractual obligations.
Smart what they have done is to make an announcement and pretend being transparent hoping that no regulator or shareholder would pick up on it. This action has to be pursued.
Here we are with a lemon of a plant, 3 years late and the plant not being able to operate efficiently for more than 3 days in a row and then having to have 3 days to fix it and we the shareholders are suffering. This would never happen with a proper Board with savvy lawyers.
Jantimot, I hope someone from the regulatory body like ASIC picks up on this point or a shareholder action groups pick up on it. I can see a +$250m action against Sinosteel as clear as a blue sky. The piece of paper signed to let them off the hook to be honest is worthless and people should be held accountable starting from NOW. We the shareholders have paid for a plant that can process 3mtpa of ore on time and on budget with all the guarantees of the contract. This has not happened.
The contract should be made public and the terms of the agreement and why the guarantees, penalties and losses and damages have been waived. THIS IS VERY WRONG.
The irony now is the guy Jiang Gongyang from Sinosteel is in charge of the whole project, 3 years behind probably being paid $500,000 a year as COO with a plant that he sold to us that does not work and why would he care hes just been let off the hook, or he thinks he has.
CDU Price at posting:
36.5¢ Sentiment: None Disclosure: Held
