The Australian Securities and Investment Commission (ASIC) has started legal action against Adelaide-based Astra Resources PLC and its directors.
The Federal Court action alleges the company illegally raised more than $7.6 million from almost 300 Australian investors between September 2011 and September 2012.
Many of the investors are South Australian – some with family connections to Astra directors through links to the Italian community in the western suburbs.
Others came to invest in Astra through failed businessman Colin Oxlade, the one they call The Ox, who is familiar to InDaily readers.
ASIC’s civil proceedings in the Federal Court of Australia are against Astra Resources, directors Jaydeep Biswas, western suburbs financial adviser Silvana De Cianni and former director Barrie Meerkin, a Gold Coast lawyer.
Astra Resources subsidiary, Astra Consolidated Nominees Pty Ltd (Astra Nominees), is also facing legal action.
“ASIC is seeking declarations of contravention against the companies and disqualification orders against Jaydeep Biswas and Barrie Meerkin, both of Brisbane, and Adelaide-based Silvana De Cianni,” the regulator said in a statement.
“It is alleged Astra Nominees made offers of Astra Resources shares while Astra Resources distributed share application forms to investors.
“ASIC alleges that funds were raised from investors in Australia in breach of the Corporations Act 2001.
“ASIC alleges Jaydeep Biswas, Barrie Meerkin and Silvana De Cianni failed to take reasonable steps as directors to prevent the illegal fundraising.
“ASIC is seeking orders to have Astra Resources and Astra Nominees inform affected shareholders that they may elect to have the share purchase contracts set aside and claim a refund or damages.”
The case commences in the Federal Court in Adelaide on 3 June 2014.
InDaily readers were first alerted to concerns about Astra Resources back in June 2012.
The company is registered in London, but it is run from a small office in North Adelaide.
It claims to control an extensive global portfolio of mining projects.
InDaily tested the company’s claims relating to six projects and discovered a collection of promises and international characters that ranged from hopeful inventors to faded celebrities.
Investors, however, were still attracted to the company and its promises.
Astra Resources is the parent company of 27 Australian subsidiary companies, two Hong Kong subsidiaries, three in India, two in Singapore, one in Cambodia, one in Nigeria, another in the Philippines and one in Hungary that manage the different projects.
In its brochure to investors it talked about iron ore prospects in India, thermal coal in Queensland, coking coal in Nigeria, manganese in Gabon and gold in Vietnam”.
It claimed to have intellectual property for a new steel-making process called T-Steel, a commercially proven micro-alloy additive’ to make “stronger and cheaper” steel.
There was more: Astra said it had acquired clean coal conversion technology, signed a deal for waste recycling of rubber into high value products in Hungary, signed on with former TV celebrity Troy Dann to “bring to life the company’s food bowl aspirations”, signed an MOU with Chinese state-owned agency China Railway Vehicle Equipment Company to commence production and would soon start dredging its Philippine iron sands project by December 2012.
Astra also claimed it had bought “technology designed to greatly reduce emissions of carbon dioxide and other gases in the energy and heavy manufacturing industries”.
By late 2013 its ongoing series of announcements started to slow to a trickle and the much-awaited listing on the Frankfurt Stock Exchange has never happened.
It now claims to be seeking a listing on the Canadian Stock Exchange.
Investors have had little joy – the most recent financial return filed by Astra (for the 2012 financial year) shows it recorded no revenue and posted an $8 million loss.
Astra directors have never responded to InDaily’s requests for interview and responses to detailed questions sent by email resulted in threats of legal action.
InDaily has sighted a list of shareholders in Astra that contains more than 700 names – around 40 per cent had South Australian addresses.
One former company office holder, Richard Walker, said early last year that “investors were very annoyed” and complaints had been made to ASIC.
It remains unclear just how much of investors funds remain in the company.
Next month’s court hearing will be followed very closely by those wanting to know if they can get their money back.
In 2012 and 2013 InDaily sought an interview with ASIC’s regional director in South Australia.
The regulator refused all requests.
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