ASX slams door on Moly Mines, leaves 4,000 shareholders in limbo
The Australian Stock Exchange has shut the door on one of its most controversy-plagued companies, Moly Mines, after ruling the firm was not allowed to resume trading due to concerns about Chinese majority shareholder Hanlong Group.
The rarely used move, which effectively blocks Hanlong and leaves roughly 4,000 Moly shareholders in limbo, comes despite Moly promising it would have the Chinese firm’s board representatives resign if allowed to re-list.
The company said it was “extremely frustrated” and “deeply disappointed” with the decision, which is also likely to thwart a $53 million takeover bid for Gulf Alumina, a small bauxite miner also being pursued by Metro Mining. This as Moly’s offer for Gulf was conditional to ASX reinstating the quotation of Moly shares on the exchange.
But the exchange’s concerns over activities of people previously involved with Hanlong and the direct or indirect influence that they could eventually have over Moly’s decisions prevailed.
For once, Hanlong founder Liu Han was executed in China last year after being found guilty of several crimes, including leading a mafia-style operation in the southwestern Chinese province of Sichuan, being responsible for several murders, running illegal casinos and selling firearms.
Shortly after, two of Hanlong’s Australian executives were sentenced to more than eight years in prison on insider trading charges related to two Perth-based companies, Sundance Resources Ltd. and Bannerman Resources.
Currently, Moly’s cash is worth about 13.3¢ a share, excluding a $10 million debt to Hanlong. It last traded at 6.9¢ in April 2014.