the real cause for concern

A recent independent review of Corporate Governance Standards of Australian listed Companies was recently conducted and covered important matters as board composition and independence, auditor independence and whether separate audit, remuneration and nomination committees were in place. The results of this review are highlighted in http://money.ninemsn.com.au/article.aspx?id=835325 and show Citigold had the lowest rating.

Mark Lynch is Citigold’s sole Executive, acting as both Managing Director and Chief Executive. The Board consists of two other Non-Executive Directors of whom one acts as the Chairman. This is a rubber stamp situation that has consistently failed to deliver on the Company’s many promises to its Shareholder. Funds appear to have been lost at a rapid rate, shares on issue have increased by about a third and this is a completely unsatisfactory situation. It is no wonder share value is significantly reducing, all while Mark was paid remuneration of $378,919 last year not to mention other perks. His five Key Management Personnel were remunerated between $303,597 and $376,839, with the Non-Executive Chairman receiving $200,612 for chairing sixteen meetings.

The latest takeover bid announced without any explanation further dilutes shareholder value, must involve high ongoing costs and makes no sense. At this point in time, even the Drover’s Dog would lead anyone to the conclusion that getting the Charters Towers Goldfield right should be the first and only priority. As a shareholder one has to wonder what’s actually behind all this and who the beneficiaries are.

It should be a concern that Citigold is being managed incompetently. Particularly, when it appears it has been run by one person as his own personal fiefdom, in an environment that lacks transparency. Citigold needs management that is completely aligned to meeting all Shareholder interests. A first step would be to replace the Board, followed by an independent and detailed audit on what’s been going on to date.