Andrew Main | January 30, 2009 Article from: The Australian
ORDINARY shareholders in defunct companies got a glimmer of hope yesterday.
A government advisory committee, CAMAC, backed the 2007 High Court decision favouring an ordinary shareholder in the Sons of Gwalia case.
In that landmark action Luka Margaretic, a Perth investor, was allowed to move up a level to rank as a creditor of the collapsed gold mining company because he was able to prove he had been misled by the company into buying shares.
Sons of Gwalia collapsed in 2005 with liabilities of more than $1 billion after its management, against a background of a rising gold price, forward sold more gold than the company could produce, thus forcing it to pay for gold it had not mined, to cover contracts.
Mr Margaretic invested $26,000 in the miner 11 days before it collapsed, on the basis of upbeat statements by management.
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CMR Price at posting:
15.0¢ Sentiment: None Disclosure: Held
