Big problems uncovered in Birimian review sparked by shareholder revolt
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A long-awaited review by the new board of embattled West Africa-focused lithium minnow Birimian has uncovered $1.8 million in unpaid taxes in Australia and Mali and a raft of corporate governance, compliance and disclosure issues.
Earlier this year, Birimian’s (ASX:BGS) shares were suspended after the new board kicked off an internal review into its activities.
The review, which saw the engagement of legal, commercial and technical consultants, involved the analysis of the company’s governance practices and compliance with relevant legal, regulatory and ASX Listing Rule requirements.
The review took place after a shareholder revolt against Birimian ultimately resulted in the departure of directors Winton Willesee and Hugh Bresser in April while managing director Kevin Joyce resigned shortly after in May.
Four months on and the new board has released its findings from the review which has identified tax, corporate governance, compliance and disclosure issues.
“Principal issues of concern which were identified related to potential liabilities relating to the non- payment or underpayment of taxes in Australia and Mali; arrangements in place for payment of the former managing director Mr Kevin Joyce’s salary; the manner and means by which certain shares, options and performance rights to entities associated with former directors were granted, serious corporate governance related matters and various disclosure issues, including misstatement of the Company’s accounts,” the company said in a statement released after market close yesterday.
The review also uncovered $386,533 of additional non-tax related liabilities.
However, Birimian sought to ease shareholders concerns stating the company now had a solid corporate foundation in place and was seeking to submit for reinstatement of its securities on the ASX.
The company appointed several advisers and technical experts including PwC to advise of Australian tax issues and Mali-based accounting firm EGCC International to audit the company’s three Malian subsidiary companies. Gilbert + Tobin were engaged to provide legal advice.
Meanwhile, Grant Thornton has resigned as auditor of Birimian after the company tried to get access to the auditor’s working papers for its audit of the company’s June 30, 2016 financial statements.
Access was at the auditor’s discretion, but Grant Thornton would only allow access to Birimian under conditions which were unacceptable to Birimian.
While in voluntary suspension, Birimian has been advancing its Bougouni lithium project in Mali announcing an updated mineral resource estimate for the Goulamina deposit.
Birimian’s shares have been suspended from trading since May 2, 2017.