Eastern Platinum Limited (EPL), a holding company with mining operations in South Africa, is facing a serious legal challenge from shareholders over the unethical sale of 100,000 metric tonnes of chrome concentrate worth hundreds of millions of rands.
EPL, which is listed on the Toronto and Johannesburg Stock Exchanges, is currently embroiled in a scandal that saw shareholders requesting a comprehensive investigation into the problem.
The source of shareholder’s concern is EPL's majority shareholder, Chinese businessman Liu Changyu's alleged unethical sale of a significant amount of chrome concentrate.
Changyu, who took control of EPL in 2016 before expanding his interest to 32% in 2021, is accused of selling the chrome concentrate at a loss.
He allegedly sold the chrome concentrate for $105.11 per dry metric tonne, according to Ulrich Roux, the attorney representing the dissatisfied stockholders.
This price is significantly lower (by more than 50%) than the market-related price of roughly $213 per dry metric tonne at the time of the deal, resulting in millions of dollars in lost revenue for the corporation.
The sale was made to Great Wall Enterprise, a US-registered corporation connected to Liu's sister, Liu Dijun.
Great Wall Enterprise specialises in animal feeds, cooking oils, and meat products, as well as auto sales, which is Changyu's principal commercial interest in China.
This raises additional concerns regarding the transaction's authenticity.
"This unauthorised and highly suspicious sale has resulted in a massive loss of income for both the company and the South African Revenue Service (SARS), a crucial source of revenue for the country," said Roux in a statement published by MiningMx.
Aside from a considerable loss to SARS, the sale's negative impact on the cash flow of EPL's subsidiary Barplats Mines Limited (BML) has left it with significant outstanding debts to local service suppliers.
The shareholders also alleged that Changyu’s sale of the chrome concentrate was part of a larger pattern of premeditated misappropriation, exploitation of South African mineral resources, and very questionable financial dealings.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
EPL, which is listed on the Toronto and Johannesburg Stock Exchanges, is currently embroiled in a scandal that saw shareholders requesting a comprehensive investigation into the problem.
The source of shareholder’s concern is EPL's majority shareholder, Chinese businessman Liu Changyu's alleged unethical sale of a significant amount of chrome concentrate.
Changyu, who took control of EPL in 2016 before expanding his interest to 32% in 2021, is accused of selling the chrome concentrate at a loss.
He allegedly sold the chrome concentrate for $105.11 per dry metric tonne, according to Ulrich Roux, the attorney representing the dissatisfied stockholders.
This price is significantly lower (by more than 50%) than the market-related price of roughly $213 per dry metric tonne at the time of the deal, resulting in millions of dollars in lost revenue for the corporation.
The sale was made to Great Wall Enterprise, a US-registered corporation connected to Liu's sister, Liu Dijun.
Great Wall Enterprise specialises in animal feeds, cooking oils, and meat products, as well as auto sales, which is Changyu's principal commercial interest in China.
This raises additional concerns regarding the transaction's authenticity.
"This unauthorised and highly suspicious sale has resulted in a massive loss of income for both the company and the South African Revenue Service (SARS), a crucial source of revenue for the country," said Roux in a statement published by MiningMx.
Aside from a considerable loss to SARS, the sale's negative impact on the cash flow of EPL's subsidiary Barplats Mines Limited (BML) has left it with significant outstanding debts to local service suppliers.
The shareholders also alleged that Changyu’s sale of the chrome concentrate was part of a larger pattern of premeditated misappropriation, exploitation of South African mineral resources, and very questionable financial dealings.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
