The Australian Securities & Investments Commission yesterday raided the West Perth headquarters of uranium play Reefton Mining after launching an investigation into suspected breaches of insider trading and market disclosure laws.
Investigators from ASIC and the Australian Federal Police not only executed search warrants on Reefton's Ord Street offices but also on the homes of several current and former officers of the company.
Reefton chairman Brad Moore confirmed late yesterday that ASIC was investigating suspected contraventions of the continuous disclosure, false or misleading statements and insider trading provisions of the Corporations Act, as well as related matters.
Mr Moore said the suspected contraventions covered the period from July 1, 2004, to April 7 this year.
The company was embroiled in market controversy in April after its long-standing managing director Roger Nikolaenko offloaded about a third of his stake in the group less than a week before uncertainty surfaced about renewals of its Namibian exploration leases.
Mr Nikolaenko quit as managing director of the company on April 1, citing other business commitments. Substantial shareholder notices lodged a fortnight later showed that he had sold 3.34 million Reefton shares on March 31 at an average price of 11.3¢.
The sales came after a rally in the stock following an announcement on March 18 that it had made a new uranium discovery at its Erongo polymetallic project in Namibia, news that drove the share price from 6.6¢ on March 17 to a close of 17¢ on March 22.
As part of their raids and document seizures yesterday, investigators searched Mr Nikolaenko's luxury Mercedes parked at the back of Reefton's headquarters and seized what appeared to be data tapes from the back seat.
While ASIC officers were searching the Reefton offices, Mr Nikolaenko told WestBusiness he did not know what matters the commission was investigating but he believed it was to do with the company's affairs in Namibia.
"They want all the documentation - they have an open file," he said. "I am not sure what their mandate is. There is a whole gang of them up there."
Mr Nikolaenko's lawyer, Martin Bennett, said the investigation related to the affairs of Reefton.
"We are happy to co-operate - there is basically nothing to be concerned about," he said.
After Mr Nikolaenko's resignation, Reefton shares went into a downward spiral after it was revealed on April 5 that it was suffering delays in getting finalisation of applications for renewals of its Namibian leases that had been lodged more than seven months earlier.
It subsequently gave the market detailed updates on the progress of its talks with Namibian authorities.
Reefton management secured the renewals for its tenements in June but Namibian authorities rejected Reefton's application for its exploration licences to include nuclear fuels, reducing hopes of the company again riding market interest in uranium plays.
The company was dealt another blow last week when it was kicked off London's Alternative Investment Market after being unable to find a replacement for its sponsoring broker, who had quit last month.
Reefton shares closed 0.1¢ down at 3.8¢ yesterday - its lowest close since January 2001.
Mr Moore said yesterday the company had taken legal advice. The advice indicated that, based on the information available to the company, there had not been contraventions by the company.
Mr Nikolaenko said yesterday he was sure the authorities would tell him if they found something.
"If they find nothing we won't even get a sorry about the bother," he said.
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