Polymetal may lose one of its independent directors: Chairman of the Committee on Personnel and Compensation Council, John O `Reilly has been tried in Australia on the case of insider securities trading. Although the Court ruled the conditional imprisonment only, shareholders of Polymetal believe that Mr. O `Reilly has to leave the company after such a scandal. Even though Polymetal was found not guilty in the case, such cases often lead to the fall of quotations and negatively affect the image of the company, analysts say.
One of the five independent directors of Polymetal - John O `Reilly - was sentenced by the Supreme Court of Victoria (Australia) due to the case of insider trading of shares, the local Sydney Morning Herald said. O `Reilly was Director of the Australian gold mining company Lion Selection Group, which owns 25% stake of gold-cooper company Indophil Resources. In mid-2008, Lion was ready to sell this package to one of the largest mining corporations - Xstrata. John O `Reilly was aware the transaction would increase the quotations of Indophil, so he bought 50 thousand shares for $ 38.8 thousand on the eve, and after the absorption sold them for $ 67.8 thousand, earning $ 29 thousand, as the court found out. For that April, 16 he was sentenced to ten months in prison, but due to the recognition and repentance of the defendant the court found conditional sentence sufficient enough. Now John O `Reilly has to behave 18 months impeccably and pay a deposit of $ 500. The court also fined him $ 30 thousand and ordered to pay $ 61.6 thousand, obtained through the crime, the newspaper writes.
64-year-old John Francis O `Reilly had been is an independent director of Polymetal since January 2007, chairing the committee of the Board of Directors on Remuneration. The manager had been working in the mining business since 1993, that time he led the Lihir Gold Limited in Papua New Guinea. From 1998 to 2005 he worked in various management positions in Rio Tinto. Since 2005, he had been serving as a Board of Directors of Lion Selection, Indophil, AuSelect Limited, Cambrian Mining and Ausenco. Until recent times he was also a member of the Board of Directors of Nautilus Minerals.
Polymetal is Russia's largest and third largest producer of primary silver, and Russia's fourth largest gold mining production. The shareholders are - Czech PPF Group (24,8%), Alexander Nesis (24%), Alexander Mamut (19%). Its revenues in the first half of 2009 was $ 502.7 million, the loss was $ 15.7 million
A source close to "Polymetal" said that shareholders appreciated John O `Reilly: he fit the company as a qualified technician. But due to the scandal, the shareholders are still planning to exclude him from the board of directors.
Source: “Kommersant” № 73 / P (4373) on 26.04.2010