Lanco cries foul over coal sale
The Indian owners of Griffin Coal are suing the administrators who sold them the Collie miner, claiming they were deceived into overpaying.
In a move that adds another layer of intrigue to Griffin's troubled affairs, it has emerged Lanco Infratech has lodged a writ in the WA Supreme Court against insolvency firm KordaMentha.
The writ claims KordaMentha engaged in deceptive and misleading conduct when it ran the sale process for Griffin in 2010.
KordaMentha partners Brian McMaster, Mark Mentha, Scott Kershaw and Cliff Rocke are named as defendants.
KordaMentha has denied the allegations and said they would be vigorously defended.
Although Lanco is said to insist the two matters are unrelated, the writ was lodged just days after the appeals bench of the NSW Supreme Court confirmed that paperwork errors in the sale documents for Griffin had invalidated the final $150 million payable on the $740 million deal by Lanco's bank, ICICI.
KordaMentha has flagged a possible High Court appeal but is also believed to be examining a statutory claim against Lanco or a professional indemnity action against its lawyers on the Griffin sale to recover the $150 million.
Although the writ does not specify the value of Lanco's claim, it is believed the group is seeking significantly more than $150 million in damages.
At the heart of its action is a claim that KordaMentha inflated the true size and value of Griffin's two coal deposits, Ewington and Muja South.
Lanco argues KordaMentha withheld two reports prepared in 2010 that showed the deposits were actually 28 per cent smaller than earlier reports suggested.
Lanco claims it was supplied with the earlier reports when it was deciding whether to buy the mine, despite KordaMentha knowing they were not up to date.
According to Lanco, if it had been aware of the later reports, it would have factored the more conservative estimates of resources and reserves into its modelling and analysis during the protracted due diligence and purchase process.
Subsequently, it would have "valued (Griffin) at a significantly lower value than it did in fact do" and "would have made a substantially lower bid for (Griffin) than it did in fact make".
