Sirius Minerals faces legal bid from shareholder group after Anglo’s ‘daylight robbery’ rescue deal
An influential shareholder organisation is assembling a legal case against Sirius Minerals after thousands of ordinary investors saw their savings and pension pots wiped out.
Sharesoc, which represents retail shareholders, has spent months investigating Sirius’s near-collapse and eventual £405million sale to FTSE 100 miner Anglo American at the start of this year.
The legal claim would centre on allegations that Sirius misled investors about the state of its financial health before a failed fundraising last autumn. It is seeking to win compensation for former investors.
Sirius boss Chris Fraser (pictured) spent years winning planning permission for its £4bn fertiliser mine under the North York Moors National Park and many of its backers were locals
For years Sirius was one of Britain’s most popular retail stocks and at one point had around 85,000 individual shareholders.
Bosses – including chief executive Chris Fraser – spent years winning planning permission for its £4billion fertiliser mine under the North York Moors National Park and many of its backers were locals.
The company rocketed in value and shares hit a peak value of 44p in 2016 – it was listed on the FTSE 250 between 2017 and 2019.
But last September a plan to raise £400million in debt – which would have unlocked another £2billion in funding – failed and within months the company was teetering on the brink of collapse. The speed of its deterioration shocked long-time investors.
The eventual 5.5p per share takeover offer from Anglo was branded a ‘mockery’ by Crispin Odey’s hedge fund Odey Asset Management.
Furious individual investors said it was ‘daylight robbery’ and that it would put them off dabbling in the stock market for life after many lost tens of thousands of pounds.
Sharesoc director Cliff Weight said: ‘The Sharesoc Sirius Shareholders’ Group has spent a considerable amount of time in the last few months preparing a review and sifting through thousands of documents and videos, as we get ready to discuss the situation with legal firms. Then we will know if there is a case.
‘As part of that process we are holding a virtual conference today to share updates with former shareholders.’
Sharesoc is preparing to approach law firms about building a claim against the Yorkshire fertiliser miner.
If the legal case goes ahead, it is likely to be a class action claim. This would mean former Sirius retail shareholders could get involved – and, in theory, institutions may be able to as well, but few of the details have been hammered out.
It comes soon after Sharesoc and law firm Leigh Day kicked off a class action suit against Link Asset Services, which managed the sale of shamed stock picker Neil Woodford’s former investments.
The Woodsmith Mine is Britain’s largest mining project and is accessing a new type of fertiliser, called polyhalite.
It is estimated that it could create 1,000 permanent jobs in one of the most deprived areas of the UK and add £100billion to the UK’s economy over the next 50 years.
The ambitious project requires two shafts a mile deep and a tunnel longer than the Channel Tunnel to take the polyhalite – a form of potash that is crushed up and spread on crops to help them grow – from the mine to Teesside.
Under Anglo’s plans, the company will start producing polyhalite in 2022. Anglo is one of the world’s biggest mining corporations.
Listed on the Footsie, it digs for copper, coal and gold at dozens of mines worldwide and owns the world-famous diamond group De Beers.
Anglo American declined to comment last night.