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Gold mining chief sues his own shareholders
The Korab Resources chairman is taking his shareholders to court and effectively demanding they pay him thousands of dollars in compensation.
The head of an ASX-listed gold explorer is suing shareholders who criticised the company on Hot Copper, demanding they pay him damages for defamation.
Korab Resources Executive Chairman Andrej Karpinski claims that the shareholders defamed him in a letter they wrote about him and sent to other Korab shareholders in October last year.
Mr Karpinski also claims that the Korab shareholders defamed him by publishing letters to the ASX and ASIC about Korab's activities as well as in a series of posts they wrote about him on HotCopper. He claims another one of Korab's shareholders defamed him in emails again earlier this year.
The legal actions have prompted HotCopper to launch a fighting fund to help pay the shareholders' legal bills.
Mr Karpinksi's remuneration, including fees paid and accrued, totalled $327,000 in the year to June 30, 2012. By the end of March this year, Korab had just $208,000 cash while the company's share price has plunged from 14c around the start of this year to just 5c.
Mr Karpinski's writ against one of the Korab shareholders seeks compensation as well as money to pay his legal fees. He has also threatened to sue another Korab shareholder over similar correspondence unless he apologises and pays compensation.
The dispute dates back to 2010, when Korab announced plans to distribute shares it held in two companies, Melrose Gold Mines and Lugansk Gold, to Korab shareholders.
Korab said then that Melrose planned to develop a 340,000oz gold project near Leonora in WA while Lugansk was developing the 1Moz Bobrikovo gold deposit in Ukraine.
But the distributions of the shares never happened, with Korab announcing last year that the move was contingent on Melrose and Lugansk being listed on the ASX.
Korab said the ASX listings had not occurred and therefore the shares in Melrose and Lugansk would not be distributed to Korab shareholders.
The decision has infuriated some Korab shareholders, who claim Korab never said the distributions were contingent on the ASX listings.
In its announcement dated June 25, 2010, Korab said: "The distribution in-specie of the Lugansk and Melrose shares is conditional only on the approval of Korab shareholders at the upcoming general meeting and nothing else.
"The distribution is not conditional on either of the two companies being admitted to ASX."
The distribution of the shares was overwhelmingly approved by Korab shareholders soon after.
However, with the shares still not distributed, Korab issued an ASX announcement on March 28 last year. Headed Clarification of Prior Statement, it said: "It has come to the company's attention that announcements by the company on 24 and 25 June 2010 incorrectly stated that ‘the distribution in-specie of the Lugansk and Melrose shares to Korab shareholders is conditional only on the approval of Korab shareholders at the upcoming general meeting and nothing else. The distribution is not conditional on either of the two companies being admitted to ASX'."
The Korab statement went on to say: "The position should have been expressed in a different way".
Korab said the distributions were to take place within six months of the companies being admitted to the ASX "in accordance with the terms" on which the company's shareholders had voted. Given that the listings had not occurred, Korab could not distribute the shares, it said.
"Legal advice that Korab has received on this fact is clear," the Korab statement said.
"The company regrets this inadvertent error and any confusion that this may have caused."
HotCopper Managing Director Greg D'Arcy said the shareholders being targeted by Mr Karpinski would fight the action in the WA Supreme Court and he called on other users of the internet discussion site to contribute to their fighting fund.
"HotCopper has set up a fighting fund so that fellow users can help these small shareholders defend themselves," Mr D'Arcy said. "This is a David versus Goliath battle and these shareholders need some financial assistance.
"HotCopper subscribers who would like to make a contribution will find the link to the fighting fund on the site's home page."
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