Great Northern Minerals - Director Payment to Formica Raise Governance Concern

What's Happening?

It has been disclosed that Director Steven Formica (via Stevsand Investments Pty Ltd and/or other related entities) has received payments beyond ordinary director fees - additional amounts without clear disclosure as to the basis of those payment.

Why it matters

Under the Corporations Act (Chapter 2E), a listed company cannot provide a financial benefit to a related party (including directors and their entities) without shareholder approval - unless it can show the terms are at arm's length (s.210)

No such approval has been sought.
No explanation has been given for why these payments were considerer arm's length.

The Conflict

Steven Formica is not just any director - he is;

• A substantial holder of FPO shares and the largest shareholder in Great Northern Minerals.
• Recipient of ordinary director fees.
• Recipient of additional undisclosed payments (no clarity on whether the payment was for consultancy or extra duties, and with no evidence of qualifications or a consultancy business).
• Beneficiary of the proposed expired option rollover (Stevsand Investments Pty Ltd holds 11.2% of that series, to be re-issued at lower strike and extended expiry).

In short: fees + extra payments + options + influence.
That combination compounds the conflict of interest and raises serious governance questions.

Board Independence?

The current board has three members:

• Two directors (Formica and King) are directly benefitting through related entities.
• The third is also the Company Secretary.

By any measure, this is not an independent board able to test whether transactions are in the best interests of all shareholders.

Bottom Line:

Formica has already received director fees, additional payments without clear disclosure, proposed cheaper/longer options, and retains influence as the largest FPO shareholder.

I will be raising this as my third query with ASX Listing Compliance, asking them to review whether:

• Related party provisions under 2.208 have been breached; and
• Whether the Company's disclosures meet the requirements of ASX Listing Rules and the Corporations Act.

Shareholders should ask: are we funding growth, or funding insiders?