*.COM:
A MOVE into the vanadium space by explorerHardey Resources has spectacularly backfired, with the Australian SecuritiesExchange alleging the company conspired to obfuscate key terms of the deals,and who would own large chunks of the company.
It hasbegun the process of delisting the junior because it would be too difficult to"unscramble the egg".
TheASX has the power to order the two vanadium transactions unwound, but becauseit cannot be sure what would be the worst course of action for minorshareholders it will instead remove the company from the official list thisweek citing multiple breaches of the listing rules.
Theregulator argues that six months ago Hardey, which still had wet paint from adeal that pivoted it from copper-gold in New South Wales to a Pilbaraconglomerate gold play, inked deals for cash and shares to secure the formerNelly vanadium mine in Argentina and six promising leases in Queensland andNorthern Territory by doing deals with two vendor groups.
Itsays Hardey's board and several corporate advisors linked to Everblu Capital,its principal Adam Blumenthal and his associates, worked to hide key aspects ofthe transactions, including the fact Blumenthal and associates stood to gainalmost 53% of the shares issued for Nelly and 64% of the shares issues for theAustralian assets.
GivenHardey's deals doubled the amount shares in the market, and that Blumenthalstood to gain an "extraordinary fee" for merely introducing thevendors and Hardey, the ASX had concerns.
Theregulator and the regulated have been hashing out the issues since Hardeyshares were suspended in September, and it was clear today the ASX does notbelieve Hardey has played with a straight bat.
Itsaid there were clear, if not fully explained, links between Hardey, Everbluand their associates, and that Hardey had been far from candid in itsinconsistent responses, and had not acted in good faith in explaining therelationships between the varies parties to the off-market transactions.
TheASX considers it likely the transactions were structured to disguise the factthat the Everblu's associates were the true beneficiaries of key shares andoptions, and this fact was concealed from Hardey's shareholders by theboard.
Itsaid Blumenthal's high fees were set before a final agreement was even signedraising the possibility the vendors were selling at an inflated price, and thatHardey shareholders were being sold a bad deal.
Hardeyargued it did not see any conflict of interests in the transactions, which itargued gave it quality assets, while Blumenthal said it was never intention toconceal his involvement, but the ASX said the market had been misled and thedeals were likely in breach of the listing rules and invalid.
Sinceit could not easily "unscramble the egg", the company's ticker willgo dark and the company will be left to try to redevelop a mining operation inArgentina privately.
No onefrom Hardey was available to speak today, but the company had previously toldthe ASX that it was willing to do whatever it took, including preparing anindependent valuation of the assets and undertaking a corporate governancereview, to square things with the ASX and maintain its listing.
It hadjust $541,000 cash at the end of September, and expected to spend twice that inthe December quarter.
Hardeylast traded on September 3 at 0.3c.
