ASA Resource Group PLC Anonymous allegations, Legal update, Freda Rebecca (5700C)
April 18 2017 - 3:13AM
UK Regulatory
TIDMASA
RNS Number : 5700C
ASA Resource Group PLC
18 April 2017
Asa Resource Group plc
("Asa Resource", "the Group" or "the Company")
Anonymous allegations & Legal update- Freda Rebecca
Further to the Company's announcement on 4(th) April 2017, the
Board has now received and considered the initial report it
commissioned into anonymous allegations made in relation to Freda
Rebecca Gold Mine (FRGM), Zimbabwe, in which the Group has an 85%
interest.
The Board is extremely disappointed to report that there is
strong evidence of funds amounting to several million US dollars
being transferred from the accounts of FRGM to entities in China,
without full value being received by FRGM.
As a result of the findings of the report and the lack of any
explanation, the Board has removed Mr. Yat Hoi Ning from the Board
and from his post as chief executive. The Board has also removed
the Group's finance director, Mr Yim Kwan, from the Board and
terminated, without notice, his contract of employment.
The Board has made the following appointments: Mr Toi Muganyi as
interim chief executive, Mr Batirai Manhando as an interim
executive director and Ms Carla Mackay as interim finance director.
Both Mr Muganyi and Mr Manhando have long experience at FRGM and
Bindura Nickel Corporation (BNC) and Ms Mackay has over 8 years'
experience in dealing with the Group's accounts and
administration.
The Directors are satisfied that a number of anonymous
allegations and press reports into matters at FRGM are unfounded
and, particularly, that there has been no thefts of gold from the
gold room at FRGM, nor had there been shipments of gold ore to
China.
Ernst & Young, auditors to the Group, who are already
progressing their audit for the Group's financial year ended 31
March 2017, will undertake further investigation. It is intended
that a full procurement audit will be undertaken as necessary.
The Directors have, and are, informing the proper authorities in
all jurisdictions where the Group carries on business of these
developments. It is anticipated that senior Zimbabwean directors of
ASA, FRGM and BNC will the meet the relevant government ministries
and authorities in Harare this week. The financial controller of
FRGM was suspended from his duties on 10th April 2017 in light of
perceived breaches of FRGM procedures. FRGM is following its own
internal disciplinary procedures.
The Company has identified that funds are still to be accounted
for by Group subsidiaries managed from Hong Kong. This is a matter
that Ernst & Young will be attending to. The cash analysis
reveals that there is a pressing need for cash at ASA, FRGM and BNC
levels and that the matters now under investigation have prejudiced
their normal cash flows. Steps are being taken to bring all cash
management under the direct control of Ms Carla Mackay and Jan
Lampen (deputy finance director who already has been given a dual
role of heading financial controls at BNC and FRGM).
In consequence of the developments, a number of appointments
made by Mr Yat Hoi Ning of Chinese managers and department heads
are being rapidly reviewed and are likely to change.
The Directors know that this news will come as a shock to many
who have placed their trust in Mr. Yat Hoi Ning and Mr. Yim Kwan
and they share the consequent disappointment with a feeling that
they have been misled.
At an initial meeting with the Workers Council at FRGM last week
feedback was constructive and the Directors hope that the workers
will see that by these actions that the Directors of ASA mean
business and give the workers confidence that their efforts will be
properly rewarded. David Murangari, Chairman of ASA, said - "This
is a very sad day for all who have been connected with ASA, Mr.
Kwan and Mr. Ning. We feel very sorry that we have been misled and
are only thankful that the anonymous allegations led to an inquiry
as a consequence of which we have identified a lot of what has gone
wrong. The executives in whom the directors reposed their trust
were misled and so it was necessary for the independent directors
to take decisive and rapid action.
Dr Scott Morrison, Senior Independent director of ASA said
"Coincidentally repeated enquiries by non-executive directors of
the executive directors into matters of finance and corporate
governance coincided with the need for an independent inquiry in
matters at FRGM. The two only came together in the last few days
when the lines of enquiries between FRGM, BNC and ASA (from a prior
year transaction) were joined together. Hard decisions have to be
made and that applies equally to executive directors as it does to
any other group employee".
In relation to the proposed new appointments for executive
directorship, Mr Murangari said: "Toi and Bati have many years
experience on the ground and under it for BNC and FRGM. I have
every confidence in them. Carla has been a bedrock of the group
finances since she joined the Group".
On a more positive note Asa Resource can now announce that its
exploration permits in relation to Zani Kodo in DRC have been
renewed until 2029.
CONTACT
London
Asa Resource Group plc.
One Fleet Place, London EC4M 7W
Ian B Dearing Ll B, Group General Counsel and Company
Secretary
Niall Henry, non-Executive Director (Investor Relations)
communications@asaukplc.com
Nominated Adviser and Joint Broker
SP Angel Corporate Finance LLP
Prince Frederick House, 35-39 Maddox Street, London W1S 2PP
John Mackay, Jeff Keating, Caroline Rowe
Tel: +44 (0) 20 3470 0470
This information is provided by RNS
The company news service from the London Stock Exchange
END
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