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Police raids jeopardise Findlay's grip on Golden West bid work

• KEVIN ANDRUSIAK
• THE AUSTRALIAN
• FEBRUARY 02, 2008 12:00AM

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THE Australian Federal Police raid on the office of Findlay Securities and two of its senior staff have cast further doubt on its work in backing the Fairstar Resources all-scrip bid for Golden West.
AFP officers are believed to have seized computers and documents from Findlays and the homes of director Robin Armstrong and senior trader Jeremy Slater on Thursday amid market rumours that the police will look at their share trading in both companies.
Fairstar, led by quarry manager Kevin Robertson, has been rejected numerous times by Golden West.
It says the all-scrip offer of seven Fairstar shares for one Golden West share is inadequate.
Golden West, chaired by iron ore industry doyen Geoff Wedlock, controls the lucrative Wiluna West iron ore project in the WA outback and shares a similar share register with Fairstar and adjoining offices in Perth.
Both companies have similar share registers and office space in Perth and have been backed by Kalgoorlie driller John Doutch.
A further complication this week was the surprise revelation by Golden West major shareholder Dubai-based Falak Holdings that it had "accidentally" sold its 8 per cent stake into the Fairstar bid, which took Fairstar to a holding of 33 per cent.
Falak had promised it opposed the bid and had initiated an extraordinary general meeting to remove three Golden West directors: Con Markopoulos, Alan Rudd and Mick Wilson.
The meeting was originally scheduled for Tuesday but was been postponed to February 19 when Golden West won its application to the Takeovers Panel to investigate the share transfer.
Falak has instructed lawyers to seek the return of the shares from Fairstar ahead of the meeting.
Neither Mr Markopoulos nor Mr Wilson returned calls from The Weekend Australian and Mr Rudd, who is also on the Fairstar board, could not be contacted for comment.
It is understood, however, that Mr Markopoulos recently met Falak representatives in Dubai and was accompanied by Matt Tomas, a business partner of Melbourne underworld figure Dominic (Mick) Gatto.
The raid on the Findlay offices added to doubts about its backing of Fairstar's bid, which has been weighed down by funding issues.
Mr Armstrong declined to comment last night.
Findlay had promised to underwrite the bid before recent falls on the Australian share market triggered a get-out clause.
It is unclear if Findlay has decided to walk away, and Fairstar managing director Kevin Robertson confused the issue further on Thursday when he said the Fairstar board believed the underwriting obligations were still in play.
However, he told the Australian Securities Exchange, "Fairstar understands that Findlay does not support this view".
Through a third party, Mr Robertson said yesterday that he believed Findlay would meet its obligations.
Fairstar would need to raise upwards of $40 million to complete the deal, well above its current market capitalisation of $30 million, while Findlay is desperate to receive the generous fees attached to the deal.
Golden West and its advisers are believed to have made new approaches, without response, to Fairstar to clear up the funding arrangements, and may make a third application to the Takeovers Panel to resolve the issue.
Fairstar posted a loss of $1.85 million for the six months to the end of December and is burning cash at the rate of $1 million every three months to fund the takeover bid.
According to its latest quarterly announcement, Fairstar expects to spend $500,000 exploring its various tenements in the current quarter.
Its bank balance stood at $1.47 million on January 1.