Yara Australia Pty. Ltd. (Yara) on Nov. 9 began legal action against Burrup Holdings Ltd. (Burrup) and its wholly-owned subsidiary, Burrup Fertilisers Pty. Ltd., after those companies blocked attempts to allow an independent auditor to undertake a full inspection of Burrup’s books. Yara had sought to exercise its rights as a 35 percent shareholder of Burrup and carry out the audit, but has been denied access by Burrup.
“Yara is disappointed with the denial of its rights under the Burrup shareholders deed. We have followed due process in our efforts to gain access and will not be deterred in exercising our rights to ensure Burrup is subjected to appropriate levels of accountability,” said CFO Hallgeir Storvik.
Yara believes the inspection is necessary to address a number of concerns, including: the failure of Burrup to prepare and file financial reports; the high cost levels within Burrup, which remain unexplained; the persistent lack of transparency and appropriate adherence to corporate governance principles by the company’s Chairman and Managing Director Pankaj Oswal; and serious allegations raised by the media regarding the misuse of Burrup funds and the failure of the company to provide an adequate explanation.
“This action is being taken in the interests of Burrup and is designed to get to the bottom of what exactly is happening inside the company,” added Storvik. “A situation where a public company has failed to prepare and file a financial report within the time prescribed is intolerable, and we will vigorously pursue our rights. In the meantime, we would urge Burrup to cooperate in the process. Mr. Oswal’s recent attempts to frustrate, delay, and divert attention from these matters of substance need to end,” says Storvik.
Yara has lodged an application with the Federal Court of Australia seeking an order requiring Burrup to allow the inspection.
Yara has been unhappy with both Burrup’s economic performance and Oswal’s attempt to turn the public company private (GM Oct. 25, 2010).