TSX eyes delisting MagIndustries over actions in Congo Republic

Wed Jun 17, 2015 3:27pm EDT
 
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June 17 (Reuters) - The Toronto Stock Exchange may delist shares of MagIndustries Corp, a company that is developing a potash fertilizer project in Republic of the Congo, after a corruption investigation found evidence of payments and gifts to government officials there, the company said on Wednesday.

The TSX has given MagIndustries 30 days to comply with requirements for continued listing, the company said. It also said its auditor, Ernst & Young LLP, had resigned, stating it could not audit 2014 financial statements according to professional standards.

The company, controlled by China's Evergreen Holding Group, on Tuesday released interim results of an investigation overseen by some directors, resulting in the suspension of Chief Financial Officer Geoff Woo.

The results include payments in 2012 to Congolese officials totaling $76,500, as well as gifts of furniture and stone lion ornaments, paid trips to China and South Africa, and construction of a villa for one official. Other allegations, including gifts of four-by-four vehicles, have not been confirmed.

Siskinds, a Canadian law firm that has pursued class action lawsuits on behalf of shareholders hurt by scandals at other companies, said it is now looking into MagIndustries.

"We are investigating whether the company's revelations give rise to shareholder claims," said Michael Robb, a partner with the firm.

MagIndustries said Evergreen has stopped funding the investigation because of insufficient funds, resulting in the resignations of the directors who were overseeing the probe.

The company launched an investigation after Canadian police searched its Toronto headquarters in January, based on a warrant that alleged corrupt payments to public officials in Congo Republic.

No charges have been announced and the Royal Canadian Mounted Police could not immediately be reached for comment.

The Investment Industry Regulatory Organization of Canada (IIROC) halted trading in MagIndustries shares on June 2. (Reporting by Rod Nickel in Winnipeg, Manitoba and Euan Rocha in Toronto; Editing by Steve Orlofsky)