Hydro quite approprriately raises the issue of "conflict".This...

Hydro quite approprriately raises the issue of "conflict".

This was the basis of the concern Melanie Leydin and I shared about the company's staffing apppointments. This is such a fundamental and clear cut issue that it would have been dereliction of a director's duty not to at least raise it as a concern. Directors need to be free to discuss the company's financial situation and direction without fear or favour.

As for Double Link and myself, I also have a conflict in principle. While not a director of DL and have no contractual arrangement with it, I am certainly an associate in a legal and business sense and have never sought to hide this fact.

On the contrary: that was one reason I was appointed a director and why presumably the vote registered for me was significantly larger than in any recent shareholder return. Mr Pursell himself commented favourably on this fact as we entered the 2008 AGM meeting.

One long standing shareholder went further after the meeting after the meeting when expressing his concern about the absence of a China deal."You should have been formally called Director China. That's what this company needs - someone dedicated to funding the Young project."

But apart from hoping that my friends at DL are rewarded for what became a very large outlay in travel, time and loss of othe potential income, the critical issue is the nature of any conflict and its alignment.

In my case I have an undeniable interest in the successful funding of the Young project by China Rail Rescources, as DL benefits. But it is:

a) contingent on that happening
b) an aligned interest.

If it doesn't happen DL receives no reward. This is a far cry from receiving a reward before an outcome has been achieved.

The other possible issue is a practical one. If DL ever receive compensation for their efforts is it fair? The agreement gives DL effectively .2% of the expected capital cost a processing plant which many in the business world might say is very under-done given the effort put into the first potential deal with Guang Ye and then the snaring of one of the largest companies in China. There was no offer of a bonus for CRR's engagement despite its scale and credentials. There were also no retainers or free carried options such Dr Jansen's enjoys.

DL is stuck with the deal and can't quarrel now. The critical issue is that DL gets nothing if Young doesn't eventuate; if it does my shares and eveyone elese's share rise. I would be more than happy with that.