African Minerals share price plummets after inquiry into chairman Frank Timis is revealed
Sierra Leone-focused iron ore miner African Minerals yesterday saw its share price plunge for the second day running, after a probe into the financial dealings of its chairman came to light.
On Wednesday it revealed that an independent investigation had been undertaken into its colourful chairman and founder Frank Timis over a deal with GIO Cyprus.
The Aim-listed company had paid $50m (£29.7m) to GIO Cyprus as a penalty for exiting a supply agreement that was approved by Timis but not put before the board. It emerged that Timis owned a stake in GIO Cyprus, as did non-executive director Dermot Coughlan, who ended up standing down over the matter.
African Minerals said yesterday that the investigation, which was concluded in July, found no evidence that Timis – or Coughlan – benefitted financially from the deal but it did not prove or disprove the allegations.
Its shares nosedived over 18 per cent on Wednesday and closed 7.3 per cent lower yesterday at 47.04p.
African Minerals was obligated to reveal the information as it is looking to restructure its debt. The company, like much of the sector, is battling weak iron ore prices that have put pressure on its bottom line over the past few months.
Deutsche Bank warned that the emergence of the internal probe could make it difficult for the company to raise funds.