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Silkroad Nickel receives writ of summons over reverse takeover fees
CATALIST-LISTED Indonesian nickel mining group Silkroad Nickel and its two executive directors have been named as defendants in a writ of summons by four Malaysian-based lawyers who were involved in the reverse takeover of the company by FE Resources.
The writ was filed in Singapore's High Court on Nov 27 by Lee Kien Han, Tee Yee Koon, Phang Soon Mun and Alvin Lee Sze Chang, Silkroad Nickel announced on Monday morning. Silkroad Nickel's major shareholder Far East Mining was also named as a co-defendant.
The four plaintiffs are seeking, among others, for Far East Mining to transfer "a certain amount of the shares" that it holds in Silkroad Nickel as consideration for "introducer fees" in connection with the completion of the reverse takeover. The consideration shares represent about 16.3 per cent of Silkroad Nickel's existing issued share capital and about 7.9 per cent of its enlarged issued share capital. The plaintiffs also want the company to make amendments to its register of members to reflect their or their nominees' interest in the consideration shares.
Far East Mining has denied the claims made in the writ and informed Silkroad Nickel "that it will vigorously defend its position", but has nonetheless commenced discussions with the plaintiffs "to clarify the matter and to seek an amicable resolution to the matter" and has given assurance that it will keep Silkroad Nickel notified at all times on the matter.
Silkroad Nickel noted that the claim by the plaintiffs on the consideration shares, if successful, would not result in a change in control of the company as Far East Mining will remain as the single largest controlling shareholder.
"Based on the above, the company, which is not the main defendant, does not expect the writ to have any material financial impact on the company and the group nor is it expected to affect the business operations of the company and the group," said Silkroad Nickel.
It said it is also seeking legal advice and will make the relevant announcements in compliance with Catalist listing rules on any material development. It advised caution in dealing in its shares.