Australia’s corporate watchdog has filed suit against suspended Western Australia mineral exploration company AVZ Minerals Ltd. for failing to disclose critical market information.
The Australian Securities and Investments Commission (ASIC) alleges that the miner breached disclosure obligations and engaged in misleading and deceptive conduct by failing to announce an escalating legal dispute in the Democratic Republic of Congo (DRC) relating to the acquisition of shares in AVZ’s flagship Manono project.
AVZ holds a 75 per cent sake in the Manono lithium project through its subsidiary Dathcom Mining. The company has been involved in a legal dispute with the DRC government relating to ownership rights to the project.
ASIC also alleges that AVZ’s managing director Nigel Ferguson and technical director Graeme Johnston breached their director duties by authorising false or misleading exchange filings related to the dispute.
ASIC Deputy Chair Sarah Court said proper disclosures were important to investors particularly when the company is operating overseas projects.
“In this case it was all but impossible for retail investors to travel to an overseas location in central Africa, in which the company’s operations are being conducted.
“In those circumstances, investors rely on the company to provide accurate and timely information.
“We allege Mr Ferguson and Mr Johnston failed to inform investors of the ongoing issues in this matter for nearly 12 months,” Court said.
“The pair allegedly failed to take reasonable steps to ensure AVZ complied with its continuous disclosure obligations and that statements to the ASX were not misleading or deceptive.”
AVZ went into a trading halt on May 9, 2022 and was suspended on May 11, 2022. It was removed from the Australian Securities Exchange on May 13, 2024.
The regulator is seeking declarations of contravention against AVZ and penalties against Ferguson and Johnston.