Eastplats shareholders plan to institute urgent proceedings in the High Court of South Africa to obtain an interdict preventing any further unauthorised transactions from taking place. Photo: Simphiwe Mbokazi (ANA)
Eastern Platinum (Eastplats), with a small market cap of R345 million, yesterday announced that its board had received unproven whistle-blower allegations, including accusations of undisclosed related party transactions pertaining to the sale of chrome concentrate at discounted prices.
Eastplats owns, directly and indirectly, a number of platinum group metal and chrome assets in South Africa. All of the Company’s properties are situated on the western limb of the Crocodile River Mine and eastern limb of Kennedy’s Vale, Spitzkop and Mareesburg projects within the Bushveld Complex.
The board said it had determined that it was in the best interest of the company to form a special committee consisting of two independent directors, George Graham Dorin and Xin (Alex) Guan.
“The Committee will be responsible, together with independent counsel retained by the Committee, for conducting an investigation, review and analysis of the allegations and if deemed appropriate will provide recommendations to the board on any necessary steps to be taken in connection with the allegations,” it said.
Business Report article on Monday revealed that shareholders in the firm were taking the company to court over the unauthorised sale of 100 000 tons of chrome concentrate worth hundreds of millions of rand.
In a statement, the shareholders claimed the sale was conducted by Eastplats’s majority shareholder, Chinese businessman Liu Changyu.
Liu, who acquired a controlling stake in Eastplats in 2016, before increasing his stake to 32% in 2021, is accused of selling the chrome concentrate at a significantly discounted price without the approval of the company's board of directors.
The shareholders plan to institute urgent proceedings in the High Court of South Africa, to obtain an interdict preventing any further unauthorised transactions from taking place.
They will also be taking legal action against Liu Changyu for allegedly breaching his fiduciary duties, and are calling for his immediate removal.
The attorney representing the disgruntled shareholders, Ulrich Roux said Liu sold the chrome concentrate at $105.11 (R1 900) per dry metric ton.
The share price was unchanged in morning trade yesterday at R2.50.
BUSINESS REPORT
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