Not on a witch hunt and I like many have skin in the game.... but the type of articles published or talked about like the below need IMO to be addressed by the company with some urgency !!Exclusive
Lithium CEO’s $US1m for Congomiddleman
Tom Richardson
An Australian lithium hopefulauthorised a $US1 million ($1.44 million) cash payment to a Congolese middlemanlast year as it frantically sought approval to mine in the country.
Perth-based AVZ surged to a near $4.6billion valuation last year before being suspended from the ASX amid a battlefor control of potentially the world’s richest lithium deposit, in theDemocratic Republic of Congo.
On June 1, one month after the tradinghalt, AVZ chief executive Nigel Ferguson authorised the cash payment to MariusMihigo, according to documents prepared for the board by lawyers at DLA Piper.
Mr Ferguson had earlier proposed to paythe DRC businessman an additional success cash bonus of $US3 million and $US2million in AVZ shares if he helped the company secure a mining licence for thetenement it claims a 75 per cent ownership interest in.
‘‘Despite open questions about hissuitability as a facilitator, he appears to be receiving a fee that is wellabove market rate for his services,’’ a separate report into the proposalprepared on behalf of the board by risk consultants Veracity said. ‘‘Whileresearch has uncovered no clear indications of Mihigo’s involvement in corruptdealings, it would not be unusual in the Congolese context for some portion ofhis fee to be used for bribes.’’ DLA Piper ultimately gave the board thego-ahead to engage Mr Mihigo after advising conditions should be imposed uponthe engagement. The Veracity report did not identify any red flags around MrMihigo, except for one association with an individual in government.
DLA Piper was engaged after AVZdirectors became alarmed by Mr Ferguson’s proposal put to the board on June 2.The lawyers were tasked with conducting a corporate governance review, ananti-corruption review, to redraft the proposed Mihigo deal, and engageVeracity to conduct additional ‘‘red flag’’ checks into the politicaloperative’s background.
On June 12, DLA Piper provided AVZ’sboard with Veracity’s interim report into Mr Mihigo, which described him as‘‘well-connected’’ and likely to be able to facilitate access to high levels ofgovernment.
DLA Piper also warned if the board hadnot exercised its powers of oversight at the June 2 meeting to engage it foradvice, then Mr Ferguson’s original plan to offer Mr Mihigo up to $8.7 millionin cash and shares to help secure a mining licence would have given rise tounavoidable questions as to the breach of duties of AVZ’s directors andofficers.
Mr Ferguson’s original proposal alsoargued that Mr Mihigo’s political connections could assist AVZ with the removalof shareholding records in the public register that allocated disputed stakesin the Manono Lithium Project to China’s Jin Cheng Mining and Congolese miningentity Dathomir.
On June 10, DLA Piper provided AVZ’sboard with a revised draft of the proposed consultancy agreement. It includednew clauses that made clearer the requirement for the receipt of valuableservices in consideration for the $US1 million cash fee and demanded a clearerdescription of the services to be provided by Mr Mihigo, alongside strongercommitments from the deal maker to adhere to anti-bribery and corruption laws.
Mr Mihigo’s social media profiles oftenfeature pictures of him with high-ranking African politicians including DRCPresident Felix Tshisekedi.
‘‘Mihigo will still have doors open,but we don’t think he will have access to the president’s private jet,’’ anunnamed source told Veracity.
On Monday the miner, which last tradedon a valuation around $2.7 billion, conceded to the sharemarket that the mininglicences it had been granted on a preliminary basis for Manono by the ministerof mines in May 2022 had been revoked due to ownership disputes betweenshareholders.
That disclosure came a day after beingquestioned by the Financial Review about the minister of mines’ decision datedJanuary 28.
Monday’s announcement added AVZ hadbeen ‘‘in prolonged discussions with the competent DRC authorities’’ regardingthe mining licence and would seek ‘‘independent legal advice’’.
AVZ is due to provide an update on thestatus of a $US240 million investment it previously agreed with Chinese batterygiant CATL for a 24 per cent stake in the explorer by February 28.
The company did not respond to arequest for comment.
AVZ already faces a class action fundedby Omni Bridgeway that alleges it failed to adequately disclose informationwhen making positive statements about its ownership of Manono, and engaged inconduct that was misleading or deceptive. AVZ is defending these claims and theaction.
