New | G-Resources’gold mine sale plan draws fire from minority shareholders

G-Resources Group’s board has come under fire from minority shareholders for its agreement last month to sell its profitable Indonesian gold mining business to a consortium led by a fund partly owned by its vice chairman.

Emotions were further stirred by the decision to allocate the proceeds to invest in property and financial businesses instead of paying a special dividend or initiating a share buy-back.

But the company’s fragmented shareholding means the sale may go through unless a large number of minority shareholders band together to vote against it, or if a substantial investor raises its stake enough to counter a potential “yes” vote from CST Mining Group, the largest single shareholder in G-Resources Group.

However, any attempt to block the asset sale will come up against the disproportionate influence in the vote wielded by G-Resources chairman Chiu Tao.

Chiu has both a stake in G-Resources, where he controls a 1.19 per cent stake, and CST Mining, where he has a 10 per cent stake. CST Mining is the single largest shareholder in G-Resources.

The proposed mine stake sale could mean minority shareholders who bought G-Resources shares solely for its mining business will either have to sell their shares at its currently depressed value, or end up stuck with the firm’s investments in property and financial businesses.