KEYBRIDGE Capital (18% shareholder) announced today it was taking Molopo Energy to Western Australia’s Supreme Court due to concerns over the decisions made by the junior’s board.
Keybridge's issues with Molopo are legion: there have been no moves by Molopo to restart trading after a July suspension, and an unusual resignation by a board member; but the real sticking point is the 50% purchase of Orient FRC Ltd by Molopo for $8.75 million.
In strong language Keybridge has damned what it sees as a murky and possibly unwise purchase.
Keybridge says that it has "serious concerns" over the conduct of Molopo's board of directors.
After no investments for three years Molopo took the "extraordinary" step of purchasing Orient, which plans to drill in South Florida, in a way that "Keybridge considers to be highly questionable".
The remaining share of Orient is held by Gil Feiler, a hedge fund manager and banker.
Keybridge wants to know how Molopo arrived at a total $17.5 million valuation for the company, something Molopo has not disclosed.
Keybridge also does not agree with the valuation from the information made publicly available and seeks to compel Molopo to open its books as a result.
Two other current concerns are the resignation of board member and director Wayne Trumble on July 24, a day before the Orient purchase and just a month after being re-elected to the board; and no effort by board members to begin trading again after an earlier suspension.
Keybridge claimed in a statement that Molopo was in breach of Australian regulations that require two board members of listed companies to be resident in Australia.
This latest move continues problems between the companies.
Earlier this month issues were flagged by Molopo that Aurora Funds Management's threats to Molopo's takeover were complicated by the fact that Aurora and Keybridge had an undisclosed relationship.
Keybridge first took Molopo to the New South Wales Supreme Court in 2014 to force a return of capital to shareholders by going over the heads of the company's board.
That effort was rejected by the court.
Molopo shares were stuck at 14c this morning."
MPO Price at posting:
14.0¢ Sentiment: None Disclosure: Held
