Lynas, Wesfarmers probe deepens as ASIC demands documents


Those notices included requests for all correspondence and detailed notes made about any meetings relating to the nature of discussions between the two parties and when the suggestion that a “change of control transaction” had been raised and between whom, sources said.

On March 1, after Mr Scott had spoken with Mr Harding and Ms Lacaze, four Lynas directors purchased $175,000 worth of shares in their company. The purchase of shares by Philippe Etienne, John Humphrey, Grant Murdoch and Kathleen Conlon — at a price of between $1.62 and $1.70 per share — was publicly disclosed.

There was no obligation to disclose that information between 18 March 2019 and 26 March 2019 because it was confidential, non-binding, and highly conditional.

Lynas spokeswoman

A Lynas spokeswoman declined to comment, but the company insists it was not in possession of price sensitive information until March 18, well after directors purchased shares.

“There was no obligation to disclose that information between 18 March 2019 and 26 March 2019 because it was confidential, non-binding, and highly conditional,” a Lynas spokeswoman said.

The company has previously told The Herald and the Age that it was made clear to Mr Scott that it was not interested in receiving a proposal and understood the matter was closed.

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“Lynas categorically rejects any assertions of impropriety,” the company said at the time.

The disclosure of the takeover talks on March 26 sent shares 35 per cent high to $2.10. Lynas shares closed 7 per cent higher yesterday at $2.04.

Specifically, ASIC raised questions about when the discussions between Wesfarmers and Lynas changed from a possible joint-venture to a takeover.

The requests for documents, made under the Corporations Act, was “highly unusual”, according to one observer close to the negotiations between the two companies.

The Herald and The Age last month revealed ASIC had raised questions with companies about when there was communication about a takeover and to whom that information went.

Lynas managing director Amanda LacazeCredit:Peter Braig

Both Wesfarmers and Lynas have confirmed this year that a possible partnership between the companies was first discussed in August last year, which would likely have included Mr Scott’s company building a facility at one of its existing plants for Lynas to use for processing its rare earths.

Lynas is currently facing off against the Malaysian government over an $800 million processing plant at Kuantan, with demands stockpiled low-level radioactive waste be removed from the site before approvals are given to renew an operating license due to expire in September.

Three directors — Mr Etienne, Mr Murdoch and Mr Harding — purchased a combined $279,993 in Lynas shares on October 30, according to disclosures on the Australian Securities Exchange.

The Herald and the Age is not suggesting any wrongful conduct on the directors’ part. ASIC and Wesfarmers declined to comment.

Kylar Loussikian is The Sydney Morning Herald’s CBD columnist.

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