Monday, August 20, 2012

Former Tujuh Bukit investor seeks class action against Intrepid Mines

Australian investors in Intrepid Mines Ltd may have choked on their coffee and croissants on Saturday morning when reading the Weekend Australia. There, in black and white glory, was an advertisement inviting participants in a class action against the dual ASX/TXS-listed company.

The advertiser, Paul Willis, mildly described his initiative as “conducting due diligence with respect to a potential class action in relation to [the] decline in the [company's] share price” but most will be inclined to believe that the action will morph into the alleged lack of disclosure on the company’s claims to the Tujuh Bukit tenements in East Java, Indonesia.

This was confirmed by The Australian’s Peter Alford who reports that Willis says "he is ready to seed-fund class actions in Australia and Canada if there is sufficient interest in suing over the company's alleged failure to properly inform shareholders of the legality and enforceability of its 80% interest in the Tujuh Bukit project."

Willis told Alford that "he set up IMN, with Indonesian nominee shareholders and directors, to hold the Tujuh Bukit tenements and bring a bigger partner into the project. The new partner, Emperor Mines, merged with Intrepid in early 2008, but Mr Willis claims Emperor's option on the project expired on March 30 that year. When he tried to introduce an Indonesian company as a replacement, Mr Willis alleged his IMN nominees joined with [Intrepid] to force him out.

"Now executive director of explorer Sihayo Gold, Mr Willis says he plans legal action over that matter. However, he said the proposed class action was a separate issue, though he had a strong personal interest because of the way Intrepid had dealt with him."

Mr Willis further claims that Intrepid investors have been "materially misled" about the security and enforceability of the Tujuh Bukit arrangement. "This was particularly so, he alleges, before Intrepid published a prospectus for its December 2010 $C112 million raising on the Canadian market. The prospectus contained the most detailed explanation to that time of Intrepid's agreements and its expectations of obtaining 80% direct equity in Tujuh Bukit."

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