Ann: Appendix 3B-CDB.AX, page-3

One of the directors will be (may be) available for comment at Downing Centre Loca Court in two weeks time.


Glen Darby has been prosecuted for assault, drug offences, disqualified driving, failing to furnish documents in a commonwealth matter, high-range drink driving, rape and resisting police.

He’s also at the helm of an ASX-listed company.

Condor Blanco Mines, an exploration company, has burned through more than $22 million, is now virtually worthless and, since at least earlier this month, is under investigation by a string of regulatory bodies.

Investigators are examining a series of irregular dealings including a highly unusual share issue involving prominent Sydney law firm Eakin McCaffery Cox.

The 2010 float of Condor Blanco Mines represented Darby’s first time as the director of a public company, at 30. But he had family in the game.

In fact, over the past decade Darby, his sister Lia and her husband Andrew Mortimer have presided over three failed ASX-listed exploration companies, which have collectively wiped out more than $75m of investor funds.

Darby made headlines in May last year, when a jury found him guilty of raping a woman who worked in the same Sydney CBD building as him.

The findings raised questions why people found guilty of serious criminal matters can continue to run companies.

While bank executives are subject to specific “fit and proper” tests under prudential rules, there are no “character” tests for executives and directors outside of banking.

According to the Australian Securities & Investments Commission, banning can occur only over breaches of the Corporations Act.

That means the corporations law is blind to indictable offences such as rape, assault, drug offences and even murder.

Further, according to the ASX, there is no requirement for a director with a criminal past to disclose that information to shareholders or the market, unless it was considered “price sensitive”.

Darby had gone out drinking with the female who worked in his building.

Later they returned to his office to collect their belongings when the pair engaged in sex acts, allegedly against the consent of the woman, who returned home and said to her boyfriend: “I think I’ve been raped.”

Darby was sentenced to at least two years’ jail but was granted bail by Downing Centre District Court judge Robert Sorby.

Justice Sorby said it was highly likely Darby’s conviction would be overturned on appeal because of inconsistencies in the jury’s findings and so granted bail, citing “exceptional circumstances’’.

The jury found Darby guilty of two counts of sexual intercourse without consent, committing an act of indecency and an indecent assault, but acquitted him of five other charges.

The apparent inconsistencies with the verdict arose because Darby had claimed all of the acts were consensual and the woman said none of them were.

On Thursday last week Darby was scheduled to appear before the Downing Centre Local Court.

More than one observer present had been expecting the findings of Darby’s costly appeal to be handed down.

Instead, the hearing was for something entirely unrelated — his lawyers were fighting against the public company executive from being sent to jail over a high-range drink driving charge.

Darby should receive lenience, they argued because he had “community responsibilities” as the “director of a publicly listed company” and had an attention deficit disorder.

It was here that magistrate Clare Farnan revealed Darby’s long history with the law.

Expressing surprise Darby was permitted to remain a director, she said it was not his first time before the court, “far from it”, and rattled off some of his other prosecutions, which were “certainly not trivial”.

Among them assault occasioning bodily harm, resisting a police officer “in execution of his duty”, “several” drink driving matters and numerous drug offences.

Darby’s case has shone light on some holes in regulatory laws.

“Quite frankly, I am surprised he can be a director of a publicly listed company,” Ms Farnan told the court.

“Are there no restrictions?”

There aren’t, at least when it comes to the type of crimes involving Darby.

As well as Darby, Condor Blanco Mines directors include his sister Lia Darby, chairman Michelle Feruglio and company secretary Peter Dunoon, an accountant who separately owns and runs the firm Sydney Accounting Practice in that city’s CBD.

On May 20 last year, days after Darby was found guilty of rape, Condor Blanco announced he would be standing aside as managing director to “focus on personal affairs” but would stay with the group as a “non-executive director”.

The same statement said Condor Blanco chairman Stavros Vlahos had resigned and would be replaced by Feruglio, a “media, PR and marketing professional”.

The statement said the company’s board would take over managing the company’s day-to-day operations “until a suitable replacement” for Darby was found.

The position of managing director has not been filled and the board, including Darby, who routinely signs off on the company’s public disclosure statements and accounts, remains in control.

Condor Blanco’s accounts suggest the company has no management or employees and is run solely by those board members.

Ms Feruglio’s social media accounts show that alongside being Condor Blanco chairwoman, she is a “group sales manager” for a media advertising sales company.

It remains unclear why Ms Feruglio was appointed as the chairwoman of the exploration company, given she appears to have no experience in the sector or in directing public companies.

Ms Feruglio did not respond to repeated requests for comment from The Weekend Australian.

Regardless of the diabolical performance of the company, its directors are being very well remunerated.

The company’s accounts show Ms Feruglio, Darby and Ms Darby each earn $48,000 a year in directorship fees.

In a highly unusual added bonus, the company’s accounts show each of them is entitled to a “termination payment” of $24,000 if they have held their position for less than six months if sacked, or $48,000 “if tenure is six months or greater”.

While he was managing director, Darby was being paid $180,000 a year plus a potential 50 per cent bonus, among other payments.

No explanation is given for those highly generous termination deals.

The trajectory of Condor Blanco Mines has been similar to that of Proto Resources & Investments, founded and run by Ms Darby and her husband Mr Mortimer, and Global Nickel Investments (now Global Metals Exploration), run by Mr Mortimer.

Each of the companies announced plans for minerals exploration and raised several million each from the public to float.

Then, against a steady backdrop of near-linear falls in the share prices, the companies continued issuing shares at increasingly low prices and all are now next to worthless.

The similarities between Proto and Condor was not lost on one newspaper, which in February 2011 highlighted the string of connections between the two companies; how Condor appeared a “Pronto II” and listed the “fee-for-all” for Condor’s directors and executive.

Regardless, the float raised $3.5m at 20c per share and the company was floated shortly after.

Its ASX filings state the company had undertaken mineral explorations in South America and Turkey but those have now ceased.

In the case of Turkey, the company says its tenements were dangerously close to Syria.

Condor Blanco Mines was suspended from trading two weeks ago by the ASX when The Weekend Australian alerted it to a string of serious concerns over its operations.

At that time, shares in the group were less than 1c each and its latest accounts show it had just $30,000 remaining in equity.

Proto was listed on the ASX in 2006 and, like Condor would later, it undertook a $3.5m capital raising, issuing shares at 20c each.

In June last year, administrators were appointed to Proto, whose shares were worth 0.1c each, the lowest possible value a share can reach on the ASX.

Global Nickel Investments listed on the ASX in 2007, with Mr Mortimer as chairman and Mr Mortimer and Ms Darby as its joint managing directors. In 2010, it changed its name to Global Minerals Exploration.

Like Proto’s, its shares are valued at 0.1c.

Mr Mortimer left the company in 2012 and Ms Darby resigned last October.

Ms Darby graduated from Sydney Girls High School in 1995 and completed degrees in law and arts at the University of Sydney

Just like his wife, Mr Mortimer had completed bachelor degrees in law and arts at the University of Sydney.

Mr Mortimer’s Pronto bio says that after university, he founded a mineral resource advisory company and company records show he and Ms Darby are the sole directors of Superstructure International, which they fully own.

Condor’s listing documents show Superstructure was paid, or was due to be paid, more than $320,000 by Condor for the “provision of corporate services”, along with 250,000 shares and 250,000 options in the new company headed by Darby.

Condor Blanco’s initial public offering documents report Glen Darby completed a Masters of Property Economics “specialising in mining projects and valuation”, but it does not say where the degree was completed.

Two years out of high school, Darby became inadvertently responsible for a new act being written into the criminal code.

Standing outside a nightclub on Sydney’s Oxford Street on February 25, 2001, Mr Darby, then 20, was approached by a police officer with a sniffer dog.

A subsequent search found Darby was carrying cannabis and a quantity of ice.

Darby was charged but fought the case through the courts, claiming the searching of a person who had been drawn to the attention of police was illegal.

The issue became a test case for the issue of sniffer dogs. A judge found in his favour, effectively ruling the police use of sniffer dogs illegal, but that finding was overturned by two subsequent courts.

To prevent the issue arising again, the Police Powers (Drug Detection Dogs) Act 2001 was created, on the back of what became known as “The Darby Case”.

Since then, Darby has done very well for himself — financially if in no other sense.

His address is listed as a large house in Clovelly in Sydney’s affluent eastern suburbs, just a stone’s throw from the beach.

An analysis of Condor Blanco’s accounts by a group of aggrieved investors, Condor Blanco Shareholders, shows the company has paid Darby more than $2m.

“The company’s directors (including past directors) have paid themselves more than $4.5m in remuneration,” said a spokesman for the group.

“Note that this amount does not include benefits that they may have obtained indirectly (such as via payments to Ms Darby’s Superstructure International).

“The share value of the company has fallen in steady decline from above $5 in 2011 (adjusted for consolidation) to less than $0.009 recently, a destruction of more than 99.8 per cent of shareholder value,” the spokesman said.

On Monday May 2, the Takeovers Panel announced it had received an application from investor Josh Farquhar “in relation to the affairs of Condor Blanco Mines’’.

The ASX suspended the company from trading on Friday May 6, after investigations by The Weekend Australianrevealed a string of questionable dealings, including recent share issues.

In September last year, Condor Blanco issued 45 million shares, which were placed in escrow with a company named in stock exchange announcements as ECM (Nominees).

Searches show there is no Australian company called ECM (Nominees). A company called ECM Nominees exists, but it is a private shelf company based in Melbourne with no connection to Condor Blanco.

A company named EMC (Nominees) is a company whose sole director is Michael Stafford, a partner in Sydney law firm Eakin McCaffery Cox.

Eakin McCaffery Cox are the lawyers for Condor Blanco.

Mr Stafford was also a director of Condor Blanco Mines until February 25 last year.

When contacted by The Weekend Australian Mr Stafford confirmed it was his company EMC (Nominees) which had been involved in the dealings with Condor Blanco, and the repeated incorrect references to ECM (Nominees) must have been “a typo”.

Fellow Eakin McCaffery Cox partner Timothy Eakin said EMC (Nominees) was an entity owned and used by all partners of the firm.

Of the 45 million shares issued, 17 million were “cancelled”, leaving 27.94 million shares issued.

Concerns have been raised because the proceeds of those 27.94 million shares have not been recorded in Condor Blanco’s accounts.

Further, documents lodged by Condor Blanco with ASIC show those shares were issued as 2.5c “paid per share” and 2.5c “unpaid per share”.

That filing suggests the owners of those 27.94 million shares could unwittingly now be forced to pay Condor Blanco for the 50 per cent of each share that is unpaid — a total of $1.125m.

The issue has raised eyebrows with the regulators: Condor Blanco is not permitted to issue “partly paid” shares.

Such issues face strict regulation to save unwitting investors being burned.

The ASX is understood to be investigating a number of other matters, including concerns the proceeds of the share issues were not used for the purposes the company had earlier claimed.

Mr Stafford said he was unsure why there apparent irregularities with Condor Blanco’s reporting of the share issue, or why the shares were recorded as partly paid.

“You will have to ask the company that,” he said.

Darby is due to appear before Downing Centre Local Court to face sentencing over the drink driving charge on June 24.

The findings of the sexual assault appeal are due to be delivered in coming months