Two directors of Baraka Energy Resources have been paid $2.5 million since they were appointed to the board in 2009 and 2011, the company trying to remove them alleges.

But Baraka chairman Colin Vost says GTT Ventures, the company which has called an extraordinary meeting for Friday to boot the board, is being opportunistic.

“They made a silly report to the Takeovers Panel,” he told Stockhead.

“They’re fairly aggressive in what they do, most of their facts aren’t correct, but the answer to these sorts of things is to sit down and talk it through.”

Mr Vost says Baraka cleaned up long-running legal issues around a Phillipines iron sands project last year, and the brakes are off the Northern Territory shale project after the lifting of fracking restrictions.

He says Baraka is now ready to run.

GTT, which helped raise $600,000 for the company in April, claims otherwise.

Last week it applied to the Takeovers Panel, which has advised in a publicly-released media statement that GTT has alleged undisclosed associations between Baraka shareholders with a combined holding of 5.96 per cent, unacceptable circumstances from “favourable” heavily discounted placements to friendly shareholders, and uncommercial and undisclosed related party transactions starting in late 2011.

Letter to shareholders

In a letter to shareholders at the end of July, GTT levelled 13 separate allegations of “lack of financial judgement and mismanagement of BKP shareholder funds”.

It said Colin and Justin Vost received $2.5 million from the company since they were appointed to the board in 2009 and 2011 respectively.

That works out to $158,000 a year for Colin and $102,500 for Justin, a director.

It says the company’s share price as fallen from 3c to 0.1c since Colin was appointed, and no drilling has taken place since Statoil pulled out of the Georgina Basin in the Northern Territory.

GTT says $4.9 million in loans from Baraka to gold explorer Cervantes Corp (ASX:CVS), suspended JV Global (ASX:JVG), and Consolidated Iron Sands, on whose boards Colin and Justin both sit, have little value to Baraka.

“The current directors have failed to secure new and prospective assets that would promote shareholder wealth,” the GTT letter alleged.

“Instead choosing to loan money out of Baraka to other listed companies that they hold majority board control over to fund their operations and make sure they are well funded and are able to pay their director fees benefits and salaries.”

GTT also makes allegations of misleading statements around a Chinese investor, which it says was actually Australia-based, and the amount of cash on hand in 2014.

Well, actually…

In response, Colin Vost didn’t want defend each point, but explained why the company had been inactive over the last few years.

Baraka has two projects.

The five-year legal battle for the Philippine iron sands only wrapped up last year, and the Northern Territory only lifted a fracking moratorium this year, enabling Baraka to start fracking its South Georgina Basin permit zones.

Statoil quit its drill holes in the Georgina Basin in 2015, after failing to find the US-style ‘elephant’ they were looking for.

“We had pretty much had all of the Georgina Basin [under permit],” Mr Vost told Stockhead.

“They [Statoil] didn’t get the results they had hoped for and walked away and that destroyed the initial [Baraka] share price. Then the oil price went down and that gave it another kicking, then the State government brought in a ban on fracking over the entire Northern Territory.”

The company’s share price has been declining since 2006 however, not moving above 3c since 2009.

An extraordinary meeting, requisitioned by GTT, will be held on August 10.

Mr Vost says the best outcome for shareholders, whether he stays in or GTT manages to get its nominees up, is for a capital raising and for the company to acquire a new asset.