Following an ASIC investigation, Mr John Lindsay Merity, 69, of Vaucluse in New South Wales, appeared before the Downing Centre Local Court charged with five counts of authorising the making of a statement to ASIC that was false or misleading and one count of attempting to cause the concealment or destruction of books.

The charges were brought by ASIC following an investigation into the identities of holders of an interest in 17,376,120 shares in Northwest Resources Limited (Northwest) that were held by Craigside Company Ltd (Craigside) and Broome Enterprises Ltd (Broome Enterprises). Both Craigside and Broome Enterprises were companies incorporated in the British Virgin Islands and operating from Hong Kong.

ASIC alleges that between October 2009 and December 2011, Mr Merity authorised the making of false or misleading statements to ASIC in response to enquiries made into the identities of the parties who had an interest in the Northwest shares that were held by Craigside and Broome Enterprises, contrary to section 1308(2) of the Corporations Act 2001. ASIC also alleges that Mr Merity in June 2010 gave instructions to another party to delete electronic communications relating to ASIC’s investigation into holdings in Northwest shares, contrary to section 67(1)(a) of the Australian Securities and Investments Commission Act 2001.

Each of the offence carries a maximum penalty of 5 years imprisonment.

The matter has been listed for mention on 8 March 2016.

The matter is being prosecuted by the Commonwealth Director of Public Prosecutions.

Background

Northwest is an unlisted public company with Australian mining interests. Between December 2004 and August 2015 Northwest was listed on the Australian Securities Exchange.

In December 2011 ASIC obtained orders from the Federal Court of Australia restraining Craigside from disposing of, or exercising any votes or rights attached to, 15 million shares that it held in Northwest (refer: 11-303AD). At the time of those orders, the parcel of shares represented approximately 11.46% of Northwest’s issued capital.

In April 2014 ASIC obtained orders from the Court cancelling the 15 million Northwest shares held by Craigside (refer: 14-076MR).  Those orders were made with Northwest’s consent and not opposed by Craigside. In seeking the orders, ASIC alleged that although Craigside was the holder of the shares, it did not have a relevant interest in them and that those that did had not disclosed that interest to Northwest, contrary to legislative requirements.

Editor's note 1:

On 8 March 2016, the matter was adjourned to 22 March 2016.

Editor's note 2:

On 22 March 2016, the matter was adjourned to 10 May 2016.

Editor's note 3:

On 10 May 2016, the matter was listed for a further mention on 19 July 2016.

Editor's note 4:

Mr Merity appeared in court on 19 July 2016 and the matter was listed for a s91 hearing under the Criminal Procedure Act 1986 (NSW) on 29 September 2016.

Editor's note 5:

At a hearing on 29 September 2016, the matter was stood over until 17 October 2016.

Editor's note 6:

At a hearing on 17 October 2016, it was decided to list the matter for committal hearing for four days from 28 February 2017 to 3 March 2017.

Editor's note 7:

A committal hearing was conducted between 28 February 2017 and 3 March 2017, with the matter adjourned to 9.30am on 10 March 2017 for further hearing.

Editor's note 8:

Mr Merity was committed to stand trial (refer: 17-061MR) and subsequently pleaded guilty to charges of giving false or misleading information to ASIC about shareholding (refer: 18-336MR).