Platinum group metals and chrome producer Eastern Platinum (Eastplats) has received the written reasons for the Supreme Court of British Columbia’s judgment in the petition of shareholder Xiaoling Ren, who sought leave to initiate a derivative action on behalf of Eastplats against certain of the former and current directors in relation to transactions between Eastplats and Union Goal Offshore Solutions in 2018.
The court has denied Ren’s leave to bring an action against all but one director, granting leave to Ren to bring a derivative action against former Eastplats director and CEO Diana Hu.
However, Ren would have to prepare and submit a fresh draft notice of civil claim setting out a proposed derivative action against Hu – which she has subsequently done. This is currently being reviewed and assessed by Eastplats and its advisers.
Ren originally petitioned the Supreme Court of British Columbia in December 2020.
Ren is represented by the same law firm that filed a similar petition in November 2018 for shareholder 2538520 Ontario Limited (253), which was dismissed in 2019, following which an appeal was denied by the British Columbia Court of Appeal in November 2020, and an application for leave to appeal to the Supreme Court of Canada denied in May 2021.
Eastplats has since filed a response seeking a dismissal of the petition as an abuse of process. The court has since denied Eastplats’ application in this regard.
The reasons for judgment, which were released on March 16, indicate that leave to start a derivative action against certain current and former Eastplats nonexecutive directors George Dorin, Michael Cosic, Bielin Shi, Shen Wang, Xin Guan and Nigel Dentoom was denied.
The application to initiate a derivative action by both 253 and Ren relates to transactions between Eastplats and Union Goal, which involved the construction, mining and processing of a tailings resource and the subsequent offtake of chrome concentrate from Eastplats subsidiary Barplats’ Zandfontein upper group two tailings facility at Eastplats’ Crocodile River mine in South Africa’s North West province.
Under the terms of the agreement, Union Goal financed and supplied the chrome processing circuit, related technology and expertise to Barplats, which in turn developed the retreatment project and is now mining and operating it.
Operations at the retreatment project began in December 2018 and ramped up thereafter.