chameleons characters and criminals history

Lets look into CHM background to see who they reaaly are or were. Below is an article published in the AFR on 4 February 2005 - yes only 3 years ago.

When you read this stuff ask a few questions like:
1. did angie sommers get her $235,000 loan to chm reaid?
2. Did Robert McLellan serve his sentence of 400 hours of community service?
3. What did the directors of chm do with the $3 million of chm shareholders money?
and finally
4. Did Nicu (now Murchison) provide any security in the form of a mining lease for a loan from CHM. The ans to the last question is no. And if there is no security there is no rights to the porperty.

CHM are trying on another dodgy claim which any decent board of directors would refuse to give the time of day and that includes the directors of mmx and mitsubishi.

There is no uncertainty about the outcome of the chm litigation other than whether or not chm have the finances to pay the respondent's legal costs.

The article below is just the 1st history lesson. More to come soon.

http://www.pierpont.com.au/arch_view.asp?id=4315

:: 04.02.2005

Chameleon had a star-studded cast

For a change today, Pierpont is going to play a little game called Spot the Stars.

Although this column will celebrate its 33rd birthday in a fortnight, never in all that time has Pierpont seen so many sharemarket stars associated with one company as there were with Chameleon Mining NL, which went into liquidation on December 22.

Pierpont apologises for not delivering the news until now, but Chameleon in its typically laid-back manner didn't announce that it had been liquidated until January 29.

This ends the career of Chameleon which in its short but colourful life boasted the richest cast of characters Pierpont has seen since Around The World In Eighty Days. Chameleon listed in August 2003, bit the dust in December 2004 and was a total disaster in everything it touched all the way through.

Even before it floated, Chameleon was a vehicle for the stars. One early director was Thomas George "Dick" Whitbread. Modern readers may not recognise the name, but Dick used to be one of the lieutenants of Mort Hutcheson at Cambridge Credit Corporation, which has been immortalised in our history as one of Australia's greatest financial disasters of the 1970s.

Dick once explained to Pierpont that because his family had a military history, he had been nicknamed Dick after Richard the Lionheart. At that time, Dick was working for Eric Jury, who owned the Black Market nightclub near Sydney's Central Station. But don't let Pierpont start reminiscing about the Black Market, some of whose clientele may still be in therapy.

Getting back to Chameleon, Dick resigned in November 2002. The prospectus mentioned that he had acted as a consultant during the float. Dick has now put in a claim for consultancy fees, which must mean Chameleon took a long time not paying him. Pierpont's not shedding too many tears for Dick, though, because there were a few widows and orphans who didn't get paid when Cambridge bit the dust either.

Chameleon's shaky ASX career appears to have begun on borrowed money. One of the claims received by the liquidator is from a company with the unlikely name of Chimera Emporium, run by Sydney businesswoman Angie Somers, who was then a friend of Chameleon's secretary, Landan Roberts.

Angie is now claiming she lent Chameleon $235,000 to get it started and that she was never repaid. With interest, her claim is now $300,000, and Pierpont hears the friendship with Landan has cooled somewhat.

Chameleon's managing director is Greg Barnes, a prospector who has enjoyed a long association with Pierpont's old chum Peter Briggs. So there are two more star names to add to the cast.

Chameleon acquired Ruby Queen and Mount Dockrell in the Kimberleys. (Incidentally, Pierpont would be interested in contact from any reader who can provide details of the historical ownership of Mount Dockrell, which seems to have passed through some colourful hands in its time.)

Mount Dockrell and Ruby Queen were bought from the "dotgone" Weboz Ltd, later known as Nicu Metals. The executive director of Weboz/Nicu was Phillip Grimaldi, whom Pierpont first met in 1988 when Phillip was running a company called Westeq in association with Bob Coghill.

Westeq was an unsuccessful investor that mopped up quite a bit of shareholder money. It bought 31 per cent of Powerplay International, which owned the Sydney Swans. No sooner had Westeq bought in than the fortunes of the Swans nosedived.

Westeq also bought 27 per cent of International Innovations, owner of the Paracel hyperbaric recompression chamber, which cured burns. The chamber couldn't cure International Innovations' cash burn, however, which was so bad that Bob barred Pierpont from attending the company's annual meeting to get more data on its affairs. Westeq was delisted the following year after failing to pay its listing fees.

Chameleon also acquired interests in some Fijian gold prospects from prospector Robert McLennan. Robert is another chap with a colourful history, having been involved in litigation with several mining companies during his career.

Robert also was a founder of a company called Red Anchor Resources, which listed in September 1990. After Red Anchor's first annual report in June 1991, the Australian Securities Commission (as it then was) formed the view that the company was insolvent and wound it up. Robert was convicted of having procured $100,000 from the company and providing false information to an auditor. Robert was sentenced to 400 hours community service.

With such an illustrious lineage, Chameleon was always bound to be a notable company. The prospectus sought $7.5 million in 20c shares, but took four months to scrape together $5 million although whether $3 million of that ever existed is debatable.

In its prospectus, Chameleon emphasised how it was going to bring Ruby Queen and Mt Dockrell on stream straight away with alluvial and heap leaching, and said the Fijian leases had world-class potential. Chameleon issued forecast cash flows to the ASX that showed the company would enjoy receipts from alluvial mining of $315,000 in 2003-04, rising to $775,000 in 2005-06.

None of this happened. Gold had not been produced from the Kimberley mines since 1964 and much of the exploration data dated back to the 19th century. Despite the prospectus statements, they never looked likely to swing into production immediately. Even if there were any mining plans, they were held up when another prospector plainted (claimed, if you like) Ruby Queen.

Fiji was even more fraught. Robert was owed $205,000 for the prospects, which was due to be paid within seven days of listing.

Chameleon didn't pay. The company told the ASX it had less data on the Fiji prospects than previously realised. The company terminated its consultancy agreement with Robert: no small exercise because Robert held 22.6 per cent of the company.

Robert promptly sued Chameleon. The lawsuit was successful in that it resulted in Chameleon being put into liquidation, but unsuccessful in that Robert has yet to recoup a cent. Interestingly, during his lawsuit, Robert was receiving advice from Bob Coghill.

The $5 million purportedly raised by the company was never in its bank account. As Pierpont has previously written, $3 million of that appears to have been phantom money.

At first, Chameleon told the ASX $3 million was being held in a solicitor's trust account. Later the $3 million was described as being on deposit.

Chameleon's report for the year to June 2004 (signed off on October 30) gave a third version. This time Chameleon said: "The Zenith group was introduced to the company early in the year as an experienced financier of international acquisitions and investments and as a company of substance". (The references to Zenith as a company and a group don't hang together, but Pierpont will get to that in a minute.)

"As a result of the company's problems with its Fijian project, the directors decided to target mining assets which the company could purchase and obtain a cash flow from," the annual report continued. "The Zenith group was requested and offered financial assistance for this purpose. Funds of $3 million plus a fee of $100,000 was agreed to be offset against a facility which Zenith would obtain, up to a sum of $8.2 million, for the acquisition of the Cerro Negro copper mine [in Chile]."

As Pierpont understands it, Zenith was pencilled into the float for $3 million worth of stock. But although the shares were issued, Chameleon never received the $3 million. Nor did Zenith buy the Chilean mine for Chameleon.

The Zenith group is run by Trevor Prider from Victor Harbor in South Australia, and his son Ian, a lawyer whose firm is based in the distant Sydney suburb of Kellyville. For the benefit of readers who are weak on geography, neither Victor Harbor nor Kellyville are renowned as centres of international finance.

The Zenith group has other discouraging features financially. Zenith Development Company (Australia) Pty Ltd, run by Ian, went into liquidation in September last year. When Pierpont learned this, he rang Greg Barnes, who said the $3 million was with the similarly named Zenith Development Company Ltd, which was run by Trevor and quite sound.

Pierpont's conversation with Greg occurred on about September 20 last year. By the end of October, Chameleon had issued accounts providing for the whole $3 million on the ground there was "some uncertainty" about Zenith Development Company Ltd, which owed the $3 million. So a sound company had become uncertain within six weeks.

Three months later, repayment of the $3 million looks totally uncertain, because Zenith Development Company Ltd turns out to be based on the Isle of Man and because Chameleon is stone broke the liquidators can't even afford the cost of a ticket to fly there.

Meanwhile, since mentioning the Priders in a previous column, Pierpont has received reports from readers who have given him some history of Trevor's past financial activities (notably in England, Germany, Montreal and Los Angeles) and would be most interested in renewing his acquaintance. One reader was even solicitous enough to ask after the state of Trevor's assets.

Chameleon's liquidator, John Vouris, must now be trying to sell Chameleon's assets, such as they are. The most valuable (in the books anyway) is the Peak Hill gold deposit in WA, which Chameleon bought from a company associated with Dean Scook. Dean is yet another star, having given us Mobi Tow Ltd, which had one of the shortest lives as a listed company that Pierpont has ever seen.

Speaking of Chameleon's accounts, the whisper around the Croesus Club is that John is having no small difficulty sorting out Chameleon's affairs, mainly because there don't seem to be many financial records. The shortage is so acute that John is reported to be puzzled as to how the company managed to publish its accounts for September and December.

It has also crossed Pierpont's mind that the Chameleon prospectus may have been a tad deficient, because it didn't mention the loan from Chimera Emporium. According to Angie's lawyer, she has made repeated demands for repayment by Chameleon. She hit the company with a statement of claim in May 2004. Yet the company didn't bother mentioning it as a present or contingent liability in its June accounts.

Meanwhile, for a fee of a few million dollars, Pierpont is prepared to write the corporate history of Chameleon for the Australian Graduate School of Management. It must be a textbook case on how not to run a company.

Footnote: Greg Barnes of Chameleon should not be confused with Greg Barns, the former politician, assiduous self-publicist and republican propagandist who runs Republic Gold.