 |
|
|
|
|
  
|
Insider tipping alleged in Baffinland take-over
Ontario Securities Commission issues allegations against former consultant and partner who launched Baffinland Iron Mines Corp. hostile take-over bid Thandiwe Vela Northern News Services Published Tuesday, January 10, 2012
In a statement of allegations issued Monday, the commission alleges Jowdat Waheed used material facts and confidential information obtained as a Baffinland consultant to launch the hostile take-over bid, which put Baffinland in play in September 2010, disrupting joint-venture negotiations between the junior exploration company and multinational steelmaker ArcelorMittal South Africa Ltd. Waheed is also accused of sharing this information with his close friend and colleague Bruce Walter, who is also facing allegations of violations under the Securities Act. "Walter and Waheed knew the hostile take-over bid would disrupt the joint venture negotiations between Baffinland and ArcelorMittal," the commission stated. "By their actions, Waheed and Walter deprived Baffinland shareholders of the opportunity and ability to benefit from future developments of the Mary River Project ... as a joint venture partner with ArcelorMittal." None of the allegations have been proven in a hearing. Confidential information Waheed allegedly received about Baffinland during and after his time as a consultant for Baffinland included its budgets and financial forecasts, exploration plans, its business plans and strategies, details about the company's permitting negotiations, Inuit Impact Benefit Agreement negotiations, and details about the company's search for a strategic partner and its negotiations with ArcelorMittal, the world's largest steelmaker. About four months after Waheed left Baffinland, he and Walter incorporated Nunavut Iron Ore Acquisition Inc., now WW Mines Inc., on Aug. 27, 2010, "for the sole purpose of launching a take-over bid for Baffinland," the commission stated. On Sept. 9, 2010, Nunavut Iron paid $12,062,600 for 20 million common shares of Baffinland and $675,000 for five million 2009 warrants of the company and, two weeks after the toehold, put the company in play with an offer to purchase all the shares for $0.80 per common share, the commission stated. Following a counter offer by ArcelorMittal on Nov. 12, 2010, which was supported by Baffinland's Board of Directors, ArcelorMittal and Nunavut Iron amended and extended their respective offers several times until Jan. 10, 2011. Four days later, the two companies announced what would ultimately be the successful bid of a joint venture to purchase all the shares of Baffinland for $1.50 per common share - Nunavut and ArcelorMittal acquiring control of Baffinland. In a statement also released Monday by WW Mines, the company said the allegations made by commission staff "are completely without merit and will not withstand scrutiny by a Hearing Panel of Commissioners." Waheed and Walter remain directors of Toronto-based Baffinland, which is in the environmental impact assessment stage for the Mary River iron ore project, located on Baffin Island. Baffinland vice president of corporate affairs Gregory Missal told News/North that "Baffinland and ArcelorMittal are aware of the notice of allegation issued by the OSC, but have no further comment." Both the accused have retained counsel and a hearing has been scheduled for 10 a.m. on Feb. 15, at the commission's offices in Toronto.
|
