A SECRET deal to give 10 million shares to two mining executives in a potentially lucrative takeover was not included in a bidder's statement to shareholders, the Federal Court heard yesterday.
The revelation emerged in a case Chameleon Mining has brought against Murchison Metals.
Chameleon alleges Philip Grimaldi and former Chameleon Mining director Greg Barnes improperly arranged share placements so Murchison Metals could purchase Iron Ore tenements in Western Australia. Chameleon now wants a cut of the venture, worth $800m.
Mr Barnes and Mr Grimaldi are both defending the proceedings.
Yesterday Murchison executive chairman Paul Kopejtka was cross-examined about a 2004 takeover deal proposed by NiCu, as Murchison was formerly known, and Winterfall, the company that owned the Jack Hill iron ore tenements.
Mr Grimaldi, a director of NiCu, and Mr Barnes, a director of Chameleon, were to share between them 10 million shares in Winterfall, following a deal done in 2004, the court heard.
Each Winterfall share would convert to one NiCu share and for every two Winterfall shares, one 20c option was granted.
Shareholders approved the purchase of Winterfall in late 2004, when the name change to Murchison Metals was also approved. But shareholders did not know Mr Barnes and Mr Grimaldi were to receive 10 million shares as part of the deal, the court heard yesterday.
Mr Grimaldi signed the bidder's statement, the court heard.
"You knew full well that there was going to be a very substantial benefit conferred on Grimaldi and Barnes as a result of this takeover. That's correct, isn't it?" Chameleon's barrister Noel Hutley, SC, asked.
"I can't remember exactly ... I would have been aware, I guess," Mr Kopejtka said.
Mr Kopejtka was not a Murchison director at the time the share deal was agreed to.
The hearing before Justice Peter Jacobson continues.
