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02/398 Yandal: $33 million payout for former Great Central Mines shareholders

Friday 1 November 2002

Shareholders in Great Central Mines Ltd (GCM) who were disadvantaged as a result of the takeover by Yandal Gold Pty Ltd (Yandal Gold) in early 1999, are expected to receive their compensation payments within two months, following orders made in the Federal Court today.

The payment amounts to approximately 18 cents for each share acquired in the bid.

Justice Merkel ordered that: ASIC expects to distribute the money within two months. The court ordered that Newmont pay ASIC $50,000 to cover distribution costs and Newmont has additionally agreed to pay ASIC’s litigation costs.

In June 1999, Merkel J ordered that former GCM shareholders have the right to repay the takeover price of $1.50 and regain their shares as an alternative to receiving the payment. Newmont has made an application to the court to remove these orders. The court ordered that: When ASIC distributes the payment, ASIC will inform former shareholders of the steps they should take if they want their GCM shares back.

ASIC has consented to this process to avoid any further delay in the distribution of the $33 million compensation to former shareholders.

In June 1999, Justice Merkel found that Yandal Gold, Edensor Nominees Pty Ltd (the trustee of the Gutnick Family Trust) and subsidiaries of Normandy Mining Ltd, breached the takeover provisions of the Corporations Law in relation to the takeover of Great Central Mines Ltd.

Justice Merkel found that the contraventions ‘enabled the Normandy group and Edensor using Yandal Gold as the bid vehicle, to make a highly successful takeover bid for Great Central Mines shares at a significantly lower price than would have had to be paid at that time had the bid proceeded without the unlawful “agreements” which secured Edensor’s “support” and contravened s615’.

He found that these arrangements ‘resulted in a significant detriment to shareholders’.

Justice Merkel ordered that: ASIC commenced the action after becoming concerned that the Great Central Mines takeover was not occurring in an informed and efficient market.

Edensor appealed Justice Merkel’s decision to the Full Federal Court, which found in March 2000 that Justice Merkel’s order that Edensor pay $28.5 million was invalid for want of jurisdiction, and that the Federal Court had no jurisdiction to hear and determine the proceedings under the Corporations Law.

ASIC successfully appealed that decision to the High Court which, in August 2000, subsequently ordered that the Full Federal Court orders regarding jurisdiction be set aside, and that the matter be sent back to the Full Federal Court.

The matter then returned to the Full Federal Court for a decision on the merits of the balance of Edensor’s appeal. In March 2002, the Full Federal Court upheld Mr Justice Merkel’s orders.

Edensor then sought special leave from the High Court to appeal the decision of the Full Federal Court. On 13 September 2002, the High Court refused that application.

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