Law firm ‘helped mines group director steal millions’
The executive chairman of a failed ASX-listed minerals group has accused the former MD of stealing millions in a share scam.
The executive chairman of failed ASX-listed minerals group Condor Blanco Mines has accused the former managing director of stealing millions of dollars from the company by operating an international share issue scam with the help of its chief financial officer and a prominent Sydney law firm.
In documents lodged with the NSW Supreme Court, Condor Blanco chairman Joshua Farquhar alleges founder and former managing director Glen Darby — currently on parole after two years in jail for rape — illegally extracted large sums of money from the company by secretly issuing, for free, large numbers of Condor Blanco shares to family members and associated entities in Chile, Hong Kong, Turkey and the British Virgin Islands.
The allegations state that for the four years to 2016, Mr Darby, with the assistance of Michael Leo Stafford, head of corporate practice and partner of Sydney CBD law firm Eakin McCaffery Cox, and accountant Peter Dunoon, Condor’s then chief financial officer, ran Condor Blanco as a ground-up corrupt outfit that fleeced investors, who collectively lost tens of millions of dollars as a result.
The allegations paint a picture of one of the most brazen scams conducted by an Australian listed company, with Condor Blanco allegedly publishing scores of fraudulent ASX announcements and doctored capital-raising documents to cover up the sham share transfers, and to disguise the fact that its global minerals exploration activities — allegedly spanning from Chile to Turkey — were an elaborate sham.
Under the alleged scheme, Mr Darby would transfer large numbers of Condor shares to his associates, who would gradually sell them on the ASX to unsuspecting members of the public, eroding the value of Condor until it eventually collapsed.
The 92-page statement of claim filed by Mr Farquhar, a former investor in Condor who was voted in as executive chairman in 2016 when the board was removed, alleges Mr Stafford and Mr Dunoon assisted Mr Darby in conducting his illegal schemes.
It alleges both men knew Mr Darby had “engaged in the criminal offence of insider trading” and had been operating “dishonestly, unlawfully, with fraudulent intent” and that both men “materially assisted” Mr Darby in this behaviour.
On behalf of Condor Blanco, Mr Farquhar is seeking financial restitution for 27.9 million Condor Blanco shares allegedly improperly issued via an arm of the Eakin McCaffery Cox law firm to associates of Darby.
It is alleged Eakin McCaffery Cox had been engaged as Condor Blanco’s lawyer from October 2012, represented by Mr Stafford, and that in May 2014 Mr Stafford joined Condor Blanco’s board as director. Ten other partners of Eakin McCaffery Cox are also named as defendants in the statement of claim, with Mr Farquhar claiming they are also liable for the losses because, in his dealings with Condor, Mr Stafford was either representing the law firm directly or was acting with “the authority of his co-partners”.
Mr Farquhar alleges Mr Stafford helped Mr Darby prepare a sham June 5, 2013, prospectus that involved a non-existent loan and facilitated the fraudulent issuing of 144 million Condor Blanco shares to a Hong Kong company, Jianxi Resources Ltd.
That company was secretly controlled by two of Mr Darby’s associates and the shares were handed over for free, it is alleged.
Jianxi Resources was in no way connected to a prominent Chinese resources company with a similar name, the document states.
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