Banned Chinese investor’s bid to oust Northern Minerals executive chairman Nick Curtis

A Chinese fund accused of covertly attempting to take control of a key critical minerals player is seeking an urgent meeting to oust the company’s chairman.

Northern Minerals executive chairman Nick Curtis. Picture: John Feder/The Australian.

A Chinese fund accused of covertly attempting to take control of a key critical minerals player in Australia is seeking an urgent meeting in a bid to oust the company’s executive chairman.

The Yuxiao Fund, which controls a 9.81 per cent stake in Northern Minerals, has requisitioned the company to call a general meeting to consider a resolution that would remove executive chairman Nick Curtis from the board, and a second resolution that would enable the fund to inspect the company’s books, and “review the legality and compliance of Nicholas Curtis’s conduct in the performance of his duties as a director and an officer”.

The push comes as the Foreign Investment Review Board investigates the fund’s suspected ­covert attempt to take control of Northern Minerals’ key critical minerals operation in Western Australia.

Northern Minerals, which holds some of the world’s largest reserves essential for military, defence and electric vehicles, referred to the FIRB what it suspects was an ­attempt by China-based ­individual Wu Tao - previously banned by Jim Chalmers from acquiring ­further shares in the company - to secretly seize control of the ­company through associated Chinese ­entities including his Yuxiao Fund.

Yuxiao Fund was banned under a prohibition order issued by Dr Chalmers on February 15 that limited its further acquisition of shares in Northern Minerals to 9.98 per cent.

The company later won approval from the Australian Securities and Investments Commission to delay its annual general meeting to February 29, pending the outcome of the FIRB review into suspicious investment activity from Chinese interests.

The annual meeting was initially due to take place on November 30, at which time Yuxiao Fund was seeking to have Mr Wu appointed as a director of the company, along with two other director nominations potentially connected with Yuxiao Fund and Mr Wu.

In a statement to the ASX on Tuesday, Northern Minerals said no views had been formed on whether Yuxiao Fund’s activities had given rise to any breaches of the prohibition order or any Australian laws, and it was considering the validity of Yuxiao’s request for an early meeting ahead of the FIRB’s investigation.

“The company is considering if the Section 249D Notice (including the resolutions contained in that notice) is valid and will comply with its legal obligations,” it said.

“Under a valid request pursuant to s249D of the Corporations Act, the directors of the relevant company are required to call the meeting within 21 days after the request is given to the company and the meeting is to be held not later than two months after the request is given to the company.

“The company notes that as an ASX listed entity it is the subject of an annual audit and half year review, including of its books and financial statements, and that the company is in compliance with its obligations with the Corporations Act and the ASX Listing Rules, and the board has robust governance procedures in place in the management of the company’s assets.”

Northern Minerals’ Browns Range project in Western Australia contains the world’s largest known inventory of dysprosium and terbium used in the manufacture of high-performance magnets, batteries and defence technologies, and is positioned to become the first significant world producer outside China.

Iluka Resources, which is building Australia’s first fully integrated rare earths refinery with $1.25bn federal government funding, is helping to finance development of the project.

The operation is considered a globally strategic operation and there would be significant risk to national security should the Northern Minerals board effectively become Chinese-controlled.

Northern Minerals was concerned that the appointment of Mr Wu as director would place Yuxiao in a position to influence or participate in the central management and control of the company.

On Tuesday the company said it had been probing “recent share buying activities by certain other persons who may have links to Mr Wu and/or Yuxiao Fund”, and was also examining the two other candidates for board seats “to understand whether there are links between these individuals and other shareholders in the company”.

Northern Minerals shares closed 3.3 per cent lower on Tuesday at 2.9c.

Originally published as Banned Chinese investor’s bid to oust Northern Minerals executive chairman Nick Curtis