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Sierra Leone Business: Accounting Firm accused Of Plotting to Steer Iron Ore Mine sale to Timis

Law360 is reporting that “A mining industry consultancy has accused major accounting firm PricewaterhouseCooper (PwC) of conspiring to ensure the sale of a Sierra Leone-based iron ore mine to a company that allegedly paid PwC $3.5 million at the time of the sale, ignoring the interests of other potential buyers and creditors of the firm looking to offload the mine.” “Fraser Turner Ltd., which has had links to the Marampa iron ore mine since 2004, says PwC ran roughshod over its rights when organizing the sale of the asset to Timis Mining Corp. Ltd. in 2014, in documents filed in London’s High Court on June 9 and seen by Law360 on Tuesday.”
“The sale was effected pursuant to a conspiracy between PwC and Mr. Dickens and Mr. Downs to ignore and/or breach Fraser Turner’s contractual rights and a wider conspiracy to ensure the sale of the Marampa Mine to Timis Mining, without regard to the interest of other potential purchasers,” Fraser Turner said in its claim.
Peter Dickens and Russell Downs were the PwC partners put in charge of administering the company, according to PwC’s website. “Mr. Dickens and Mr. Downs acted unfairly to harm the interests and contractual rights of Fraser Turner,” the mining consultancy added.
PricewaterhouseCoopers LLP has been the target of other civil suits in the U.K. from claimants alleging the firm has abused its position as administrator for struggling companies in order to boost profits, and that it conspires with companies looking to buy up assets at bargain prices.
A spokesman for PwC had not been able to respond to requests for comment by the time of publication.
London Mining PLC was created in 2005 to develop iron ore mines and — through its subsidiary London Mining Company Ltd., or LMCL — owned the Marampa mine in Sierra Leone. However the sharp downturn in global iron ore demand resulted in severe liquidity problems for the firm, which went into administration under PwC in 2014, according to PwC’s website.
Fraser Turner alleges that Timis Mining paid PwC $3.5 million at the same time that it bought LMCL’s assets. Timis Mining is part of the Timis Group of companies run by Vasile Frank Timis, a Romanian-Australian businessman.
Fraser Turner first became involved with the Marampa mine in 2004 when the mine’s former owner, Tecsbaco International Incorporated Company (SL) Ltd., engaged the consultancy to find a buyer for the mine’s lease. The following year, London Mining began to use Fraser Turner to provide services connected to the mine.
London Mining bought the mining lease from Tescbaco in 2006 before eventually sealing a deal in 2012 with the Sierra Leone government to extend the lease from 25 years to 40 years.
Fraser Turner claims that under a deed signed with London Mining in June 2012, the consultancy was entitled to a 0.3 percent royalty payment of the market value of any iron ore sold out of the Marampa mine.
London Mining and LMCL had agreed to transfer the royalty payment requirements to any firm which subsequently bought the mine, Fraser Turner says. But LMCL, acting through its receivers at PwC, sold its assets to Timis Mining in October 2014 without transferring Fraser Turner’s right to royalties, the documents allege.
Fraser Turner is represented by David Lord QC and Richard Bowles of 3 Stone Buildings and Richard Viegas of Collyer Bristow LLP. Counsel information for PwC, Dickens and Downs was not immediately available.
The case is Fraser Turner Ltd versus PricewaterhouseCoopers LLP, Peter Dickens and Russell Downs, case number HC-2017-001575, in the Chancery Division of the High Court of Justice of England and Wales.
Culled from Law360
Monday July 10, 2017.

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