
The company said it disclosed the matter to the AFP on July 30 and that it continued to cooperate with the AFP’s investigation.
Solomon Islands payments under investigation
Tess Ingram | Sydney Morning Herald
Payments made by miners Allied Gold and St Barbara to a Solomon Islands’ government official are being investigated by the Australian Federal Police.
Allied Gold, which was acquired by Perth-based St Barbara in 2012, allegedly provided benefits to the Solomon Islands’ outgoing opposition leader Matthew Wale from 2011.
St Barbara then continued to pay the benefits until earlier this year, according to a report in the Solomon Star newspaper on Friday.
St Barbara said in a statement to the Australian Securities Exchange late on Friday that through its internal mechanisms it became aware of the payments and had reported the issue to authorities including the AFP, the UK Serious Fraud Office and the Solomon Islands Attorney General.
The company said it disclosed the matter to the AFP on July 30 and that it continued to cooperate with the AFP’s investigation. St Barbara declined to comment further on the issue at this time. Documents compiled by St Barbara’s legal counsel and reportedly obtained by the Solomon Star allegedly reveal that numerous executives from both Allied and St Barbara maintained relationships with Mr Wale that were of mutual benefit.
The companies allegedly paid for Mr Wale’s children to attend the Anglican Church Grammar School in Brisbane, with annual fees reportedly as much as $113,000.
They also allegedly arranged employment for a relative of Mr Wale’s and other smaller benefits, including a $13,500 payment to Mr Wale for “office set up expenses”.
Allied Gold was reported to have initially benefited from the arrangement, allegedly gaining a letter confirming the legality of blasting at its Gold Ridge mine, now owned by St Barbara, the issuance of a special prospecting license for a tenement, and the removal of certain travel restrictions.
St Barbara did not confirm or deny any of these allegations in its statement to the ASX, including the involvement of its former managing director and chief executive officer Tim Lehany and then secretary Ross Kennedy.
It did however correct the article’s reference to the “dismissal” of Mr Lehany and Mr Kennedy on the grounds of the payments, stating that Mr Lehany left the company this August as part of an “agreed departure” and Mr Kennedy was made redundant in March.
At the time of the Allied Gold transaction, the newly combined group boasted a market capitalisation of roughly $1 billion but a series of operational difficulties has seen St Barbara’s market cap fall to around $70 million. In the same period, its share price has fallen from $1.75 to 14.5¢.
St Barbara entered the gold industry in 2005 via the acquisition of several West Australian gold assets from the liquidators of Sons of Gwalia, before branching out into the Pacific with the $556 million acquisition of Allied Gold in 2012.
The Gold Ridge mine in the Solomon Islands and the Simberi mine in Papua New Guinea promised strong growth opportunities for the miner, but neither operation has performed near expectations.
Simberi remains beset with technical issues and mining at Gold Ridge has been suspended since April due to serious flooding and illegal mining.
St Barbara said it does not expect to resume production at Gold Ridge this year and has begun talks to potentially transfer ownership of the mine to the Solomon Islands government.
In August, St Barbara reported a $501 million full-year loss for the 2014 financial year, including a $411 million hit for the non-cash impairment of its Pacific operations.
Clearly St Barbara is misleading the market, their shareholders and stakeholders by stating that they only found out about this fraudulent activity earlier this year. St Barbara took ownership of Allied Gold in 2012 and paid the scholarship for another two years while slashing and burning the other development programs they inherited. The mere fact that the scholarship in question was not subject to the same slash and burn treatment indicates that St Barbara knew exactly the reciprocity of the relationship with the scholarship beneficiaries back in 2012. The question that the article should be asking is who at St Barbara decided to maintain this relationship and pay the scholarship? For St Barbara to continue to place blame on Allied Gold two whole years later indicates that they cannot take responsibility for their actions. Not only should all of their Board go but all of their management as well, without any golden handshakes. After all we have all suffered at the hands of St Barbara’s management either through the dramatic decline in share value or the loss of genuine scholarships, jobs and royalties. Isn’t it time for St Barbara to come clean and really say that the leaking of the Wale’s story was a convenient diversion at a time when they want to get out of the Solomon Islands without any accountability for the impending environmental disaster at Gold Ridge’s tailings dam. St Barbara it is time to come clean and be a responsible corporate citizen?
Ditch, you make some good points. St Barbara’s new CEO clearly stated in their last online quarterly report that they wanted to leave SI with no liabilities. What a good distraction to suddenly “find” fraud – even though this scholarship had been continued to be paid long after the handover – when you want to leave a country with an environmental disaster. Either St Barbara’s HR team is totally incompetent for not managing their programs or this is an epic game of shadows and mirrors by St Barbara to get out of SI without any accountability.
Sorry to burst the conspiracy bubble but St Barbara is not sophisticated enough to manage smoke and mirrors. It is a simple case of “Nero fiddled while Rome burnt.” In this case Katie-Jeyn Romeyn and her sidekick, Natalie Flynn were too busy running around Australia telling everyone how well they paid themselves and getting awards for it, while the company was crumbling around them…