This is the same Sheldon Coates who has placed FAS in...

This is the same Sheldon Coates who has placed FAS in receivership. Let's hope when he is done with the Doutch clan he has time to nail the Robertson ring.
Geologist gets OK to drill down on Classic
Neale Prior - The West Australian on November 23, 2016, 7:03 am

John Doutch
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The Supreme Court has given a dissident former geologist at gold explorer Classic Minerals the go-ahead to drill down on dealings involving the family of Classic chief executive Justin Doutch.
Geologist Sheldon Coates, who remains a substantial shareholder of Classic, has won access to company records after detailing his worries about loans, commissions, share issues, drilling deals, and transactions linked to the Doutch family.
Mr Coates wants to examine a $407,527 commission paid to a company linked to Justin Doutch’s father, high-profile Kalgoorlie prospector John Doutch, around the time of Classic’s float in 2013.
Mr Coates has also raised concerns about a consultancy agreement with a company linked to Classic director Kent Hunter and the forgiveness of a $265,289 loan to Classic consultant James Passaris, who played key roles in the float.
The concerns were outlined in a series of affidavits filed by Mr Coates in the Supreme Court and summarised by Supreme Court Acting Master Larissa Strk in a ruling that pushed aside Classic’s assurances that all transactions had been examined by auditors.
Classic and Mr Doutch opposed the access order, defending the dealings impugned by Mr Coates. It said payments to a John Doutch-linked company and Mr Hunter, as well as other transactions under question, were calculated in line with market or commercial rates.
Master Strk said there had been a breakdown in the relationship between Mr Coates and Classic, but this did not mean a person had an improper purpose merely because they were hostile to directors.
The judicial officer said pursuing a suspected breach of duty was a proper purpose and Mr Coates’ suspicions were enlivened by a high rate of cash outflow after Classic floated.
Among the dealings Mr Coates is troubled by are high-interest loans involving Justin Doutch’s wife Samantha, according to the judgement. He is also troubled by a caravan rental deal with Justin Doutch’s uncle Kimberley Doutch and a Kalgoorlie rental agreement with the chief executive’s sister Rhianna Doutch.
He also took aim at a drilling contract with Denarda Holdings Pty Ltd, a company directed by Kimberley Doutch that has John Doutch as a shareholder and former director.
“The amounts paid ...for drilling services particularly trouble Mr Coates, which includes an an amount of $200,277 as a pre-payment for future drilling services,” Master Strk said in her judgment.
“Mr Coates is also troubled by the engagement of Denarda in circumstances where he says a cheaper quote for the same services had been obtained from a third party.”
Justin Doutch denied obtaining a lower quote than he could obtain from Denarda. He said interest rates on loan deals involving his wife were commercial in the context of the risks involved, and rental deals were at commercial rates.
Master Strk found concerns raised by Mr Coates were “substantive and not fanciful” and were not “artificial, spurious or contrived”.
The Master said she did not have to decide whether there had in fact been any impropriety or irregularity, but rather whether Mr Coates had raised an appropriate case for inspection of the company records relevant to his concerns.
She said the fact that there had been audit of the company’s records did not preclude an inspection by Mr Coates given the nature of concerns he raised.
She left it open to the parties to make submissions about precisely what records should be accessed.