ASIC takes Padbury Mining to Federal Court for 'misleading' investors over failed multi-billion-dollar funding announcement
By finance reporter Elysse Morgan
Posted 39 minutes ago PHOTO: ASIC wants Gary Stokes, managing director of Padbury Mining, banned from managing companies. RELATED STORY: Padbury had not locked in $6.5 billion Oakajee financing RELATED STORY: Padbury stocks plunge after failed financing deal MAP: Oakajee 6532
The corporate regulator is taking directors of Padbury Mining to the Federal Court over a failed multi-billion-dollar funding announcement that went sour and burned investors.
Padbury, a small Western Australian explorer, shocked the market when in April last year it announced it had secured funding to build a $6 billion port and rail network at Oakajee.
The company's managing director Gary Stokes labelled it a "major breakthrough for the company and the region".
The company's shares shot up 170 per cent.
However, it started to unravel when it was revealed that the two companies that were to stump up the cash, Alliance and Superkite, were not Asian super investors, but controlled by colourful Sydney businessman Ronald Byer.
Under pressure from investors and regulators, Padbury Mining promised to shed light on further details of the funding arrangements, until revealing in late April that any deal it had was kaput.
Shares plummeted from 4.5 cents to 0.04 of a cent.
More than a year later, corporate watchdog ASIC has launched action in the Federal Court against Padbury Mining and directors for misleading investors when they claimed to have secured the multi-billion-dollar investment.
ASIC alleges Padbury's announcement of the funding deal was misleading and was in breach of continuous disclosure obligations as it failed to disclose the identity of the companies involved.
It believes directors Gary Stokes and Terence Quinn failed to take due care and diligence, allowing the company to make the misleading announcement.
ASIC is seeking financial penalties against Mr Stokes and Mr Quinn and wants them banned from managing companies.
The case will hit the Federal Court in Perth on 15 July.
PHOTO: ASIC wants Gary Stokes, managing director of Padbury Mining, banned from managing companies.
