Sunday Reading Part 2Dodgy dealings- You don't need to be...

Sunday Reading Part 2

Dodgy dealings-

You don't need to be Einstein to work out the guilty party but it helps.



Chameleon changes tack in court case
Susannah Moran From: The Australian October 15, 2009 12:00AM
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CHAMELEON Mining is upping the stakes in its court action against Murchison Metals by seeking to amend its case to push for further damages in its fight over lucrative iron ore tenements. Yesterday, the case was adjourned for a day to allow Chameleon to formulate its revised claims. The parties will return to court today to argue whether the new claims can be allowed.

Chameleon is pursuing Murchison, former Chameleon managing director Greg Barnes and former Murchison director Philip Grimaldi in the Federal Court. Chameleon says its money was used to fund a 2004 deal to buy iron ore tenements -- but that its shareholders got nothing in return. It says Mr Barnes and Mr Grimaldi breached their duties, and is seeking a slice of the estimated $800 million the Jack Hills tenements are worth.

Yesterday's move to amend the statement of claim follows the evidence of Nik Zuks, who gave evidence on Monday and Tuesday. Mr Zuks was involved in the Winterfall company that was looking for funds to pay further instalments on the tenements. He told the court he met Mr Grimaldi and Mr Barnes at a Perth pub in April 2004 where Mr Grimaldi said: "Don't worry, I've got the money and I can do it."

An agreement was quickly signed, and NiCu, as Murchison Metals was then known, was going to provide finance. In addition, Mr Zuks told the court, both Mr Grimaldi and Mr Barnes said they wanted to be "rewarded" for the introduction to the project. They later received 10 million shares in Winterfall -- which would later convert to 10 million shares in Murchison. However, this deal was not disclosed in the bidder's statement of Murchison's proposed takeover of Winterfall. They also received 12 million options, which were later converted to shares.

Mr Zuks told the court the promised funding was slow in coming from Mr Grimaldi, and it was "a bit of a surprise" to learn that a $56,000 cheque from Chameleon Mining, signed by Mr Barnes and his secretary, was to be used to pay for one of the instalments in the project. A further $96,000 was also to be paid by Chameleon.

Mr Zuks said he asked for "evidence" that the payment could be made because of concerns he had that it could be a related-party transaction, and that Mr Barnes was "uncomfortable" when the matter was raised. "It stuck in my mind, where Barnes sort of -- his words weren't flowing clearly. He just felt uncomfortable with it. Why, that was his business, but I could see that something was not right."

Mr Zuks said he was told that the two companies "had this arrangement where they, from time to time, loaned money to each other".