PERTH (miningweekly.com) – ASX-listed Keybridge Capital has launched legal action in the Supreme Court of Western Australia to gain access to information regarding Molopo Energy’s proposed acquisition of a US oil and gas project.
Keybridge, which holds an 18.478% interest in Molopo, said on Monday that the company had “serious concerns” regarding the affairs of Molopo, and the conduct of the current board of directors.
Molopo’s shares have been suspended from trading on the ASX since July this year, and Keybridge said that the Molopo board had not taken any action to have the suspension lifted, nor had they outlined any timetable or action plan for the lifting of the share suspension.
Furthermore, Keybridge noted that the Molopo board had failed to undertake a single investment for a three-year period, only to announce an A$8.75-million transaction to acquire a 50% stake in a US oil and gas project owned by Orient FRC.
“The Orient transaction is of great concern to Keybridge and it is unable to reconcile, from the public information available, the basis on which the board of Molopo would consider it to be in shareholders' interest for Molopo to spend A$8.75-million of Molopo’s cash reserves in the circumstances that Molopo has announced to the market,” Keybridge said.
The shareholder has turned to the Supreme Court in an effort to gain access to information regarding the Orient transaction, including whether the board of Molopo had obtained a valuation of Orient prior to the transaction, considering that the deal created an implied value of A$17.5-million for the whole of Orient.
Keybridge also noted that no financial details have been provided on the assets or liabilities of Orient, and that no information has been provided to show that Orient had the financial or technical capacity to undertake the expenditure commitments associated with its future drilling obligations, or to finance any successful drilling well into production.
Keybridge was also questioning the structure of the Orient transaction, which would see Molopo pay the cash sum to private vendor Gil Feiler, rather than through a farm-in or share subscription agreement, which was the norm.
Furthermore, Keybridge was questioning the resignation of Molopo director Wayne Trumble one day ahead of the Orient transaction being executed, as he was only re-elected to the board in June this year. The shareholder noted that the resignation of Trumble also left Molopo in breach of the Corporations Act, which requires a public company to have at least two directors who ordinarily reside in Australia.
A spokesperson for Molopo Energy on Monday told Mining Weekly Online that the company refuted the claims made by Keybridge, and intended to defend its position in court.