Below is my communication with Maurice Blackburn. I'll keep you posted.
Thanks.
Hello,
Thanks for the reply. (My coordinates are below.)
Due to the time difference I will communicate by email to make matters simpler.
As mentioned in my communication several days ago this concerns the Paladin Energy administration process and the events leading up to Administration. Perhaps your firm is already aware of the situation whereby 23,000 shareholders are being wiped out (except for 2% of our shares!). I own approximately 400,000 shares .
I invite you (Mr. Watson) to review the public records contained in the Paladin Energy website www. paladinenergy.com.au especially the Administrators’ report to creditors.
I believe that there have been suspicious (perhaps illegal) maneuvers committed by their partner (CNNC) in LHM as well as their customer EDF.
Summary:
CNNC: In the event of Paladin’s insolvency CNNC had an option to purchase the remaining 75% of LHM. A restructure package was almost completed in early 2017 but was contingent on CNNC waiving their option on the 75% which they declined to do since CNNC claimed that Paladin was insolvent . CNNC contributed to Paladin’s financial mess, in part, because they didn’t contribute their pro-rata share of operating losses for the LHM!!
Paladin denied their claim for insolvency but since CNNC held all the cards (a real catch 22 in that they would not waive their option) the restructuring was doomed. In my opinion CNNC committed an illegal act and a gross conflict of interest which torpedoed the restructuring proposal to the detriment of shareholders. At the last possible minute they triggered the option to purchase and once the mine evaluation was done
they declined to proceed exercising the option!! Their maneuvering was all for nothing but they succeeded in destroying any chance of a restructuring. Why didn’t they simply do an evaluation months before ? In fact when you own 25% of a mine you have an excellent opinion as to what the other 75% is worth. I believe they did all of this to destroy the company and put it in Administration so they could pick up the shares for nothing.
EDF : Provided Paladin a large loan in 2012 backed by certain security in Canada (Michelin which had to have a value equal or more that the loan). The EDF transaction included an offtake agreement to sell uranium at a certain price starting in 2019 which is now cancelled. EDF claimed that the value of Michelin was now less that the loan and now wanted their loan repaid within 30days. (That is when Paladin management put the company into Administration). During the Administration process they turned around and stated
that they now want the Michelin land after all! Their demand for loan repayment resulted in the Administration mess that we are now in and now they want Michelin after all!
KPMG: Appointed back in July. They are unreasonably pushing through the Administration DOCA Proposal at a time when uranium pricing is on the upswing due to large production cutbacks at Cameco and Kazakhstan . KPMG have engaged appraisers over the last six months to evaluate the value of Paladin’s assets
but all their evaluations are now obsolete due to these very recent cutbacks. . I am quite confident that the value pf Paladin’s assets will double within the next six months.
Both CNNC and EDF have used various clauses in their agreements in devious and deceptive (illegal?) maneuvers without any concern whatsoever for common shareholders. The self-serving transgressions of CNNC and EDF resulted in the company being placed in Administration by Paladin management when a restructuring package was almost complete back in early 2017. KPMG , by expediting the Administration process, is condoning the transgressions committed by CNNC and EDF to the detriment of 23,000 common shareholders.
Please find attached various emails that I have sent Mr. Woods of KPMG indicating my concerns about the situation.
If , after reviewing the file, you believe that shareholders have a class action case I invite you to :
- Communicate directly with Matthew Woods at KPMG to understand his version of the events
- Open an account with Hotcopper and communicate on the PDN bullboard indicating your coordinates. Some contributors have intelligent comments and some do not.
- Many shareholders have voiced their concern over the Administration process as well as to the events leading up to Administration and may assist you in any class action that might occur
- Hold CNNC, EDF and KPMG responsible
- Rework the DOCA so that shareholders get fair value based on the upswing in uranium prices.
FYI this is what I recently posted on Hotcopper (please note the dates):
- According to KPMG’s letter of Dec 5 (and validated on Dec 8) a court order under section 444GA is necessary for completion of the DOCA.
- Directions hearing scheduled for Dec 12 (court scheduling procedures)
- Substantive hearing for Dec 21
- As of Dec 11 the Explanatory Statement and the Independent Expert’s Report (determines the value of Paladin shares in event of liquidation) will be available for download. NOW DELAYED.
- After reading the documents listed on the various websites (ASX/KPMG/Paladin) shareholders have the right to provide their views to the judge on the section 444GA hearing by Dec 19
- Shareholders are asked to provide their reasoning why the DOCA is incorrect and prejudicial to shareholders, given the rapidly improving uranium market and improving asset values, by Dec 19 before the substantive hearing on Dec 21.This is a critical date.
- In addition, shareholders are invited to call class action lawyer Andrew Watson at Maurice Blackburn, Tel: (03) 9605 2735, to explain our plight given the CNNC and EDF self-serving and destructive actions which destroyed shareholder equity and any chance for a reasonable restructuring and KPMG’s refusal to take action against them.
Your comments would be greatly appreciated.
Thanks
(20min delay)
