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15th August 2018

Sierra Leone's £75M Marampa Mines Deal Drama Plays Out in the UK High Court!

By Christopher Williams (31/03/18)

The accounting giant PWC has been accused of cheating consultants out of £75m in a deal with controversial mining tycoon Frank Timis.


Reports say consultants' court files allege that the accounting giant sold Sierra Leone mines for less than it was worth as revealed in the UK High Court battle over natural riches in Sierra Leone. (Photo: Frank Timis, owner of Marampa Mines).

Fraser Turner alleges that PWC administrators sold the Marampa Mines to Timis Mining on terms that meant its rights to royalties on iron ore were breached.

The mines had been owned by Aimlisted London Mining, which went bust in 2014. Within two weeks Marampa was bought out of administration by Frank Timis, a Romania-born mining entrepreneur with a chequered history that includes a fine for misleading Aim investors in Regal, a company which he was chief executive of, and a conviction for heroin dealing in Australia.

Amid mounting debate over conflicts of interest among the Big Four accountants, court documents allege that PWC held a string of different roles linked to London Mining and Mr Timis.

According to a claim filed at the High Court in London by Fraser Turner, PWC advised a syndicate of creditors prior to the administration, and the company and senior lender Standard Chartered. It also worked for Standard Chartered on attempts to secure new investment from third parties including Glencore, court documents claim.

Once rescue talks failed, PWC partners Peter Dickens and Russell Downs were appointed administrators. Fraser Turner alleges that when Timis Mining bought Marampa two weeks after London Mining entered administration it paid PWC a substantial sum.

Mr Timis gained control "effectively for nothing other than an assumption of responsibility for the principal sum due to the secured creditors and payment of $3.5m to PWC," according to court documents. Fraser Turner alleges that Marampa changed hands for less than it was worth. The consultants claim that they were owed a 0.3pc royalty on iron ore from Marampa, including a $70m (£50m) stockpile that had already been mined. It is alleged that PWC's conspiracy to transfer ownership to Timis Mining cost Fraser Turner at least $106m, according to court documents.

PWC denies the allegations and a trial is due later this year. PWC claims that Fraser Turner was not entitled to royalties under any new owner. Frank Timis's bid succeeded because he agreed to take on all of London Mining's £225m secured debt, whereas a refinancing offer from the Indian giant JSW demanded a steep cut in liabilities.

Timis Mining demanded the transfer of Marampa on a "clean" basis, however, so existing contractor and supplier contracts were scrapped, according to court documents, including a 2pc royalty agreement with Blackrock. Fraser Turner's allegation that PWC received $3.5m from Timis Mining is "scurrilous and vexatious", defence documents claim.

PWC said: "We believe the claim is without merit and are optimistic it will be dismissed."

Courtesy: The Sunday Telegraph, March 25, 2018


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