DOYLES Creek mine investors fighting for compensation from the NSW Government after losing their investments following corruption hearings have been challenged about "who should be in the pot and who should not be".
Hunter investor Darrell Lantry told a NSW parliamentary inquiry considering the compensation claim that anyone who invested after January, 2014, when the NSW Government cancelled the mine's exploration licence, should not be eligible. Mr Lantry said investors should also be compensated for their "potential losses going forward".
Investor Rodney Doyle told the inquiry that "compensation should be paid for the wrongs that were committed" and the exploration licence "should probably be given back to NuCoal".
Both men agreed they invested some money in NuCoal Resources after warnings of risk attached to its Doyles Creek mine project. The warnings related to the potential for corruption hearings about how an exploration licence over the area was granted to Doyles Creek Mining in 2008.
NuCoal Resources later bought shares in the company. A judicial review in September, 2015 found NuCoal, as an entity, was not involved in any wrongdoing.
Both houses of NSW Parliament referred the matter to the Independent Commission Against Corruption in November, 2011, which in 2013 found the licence release process had been corrupted.
During a hearing before parliament's standing committee on law and justice in August NuCoal Resources non-executive director Glen Lewis confirmed residents near the proposed mine raised serious concerns about the licence release process and a proposed Doyles Creek training mine at a community meeting in July, 2009, one month after he became a director.
"They made it pretty bloody clear they thought the training mine was a ruse, a watch-my-hand exercise, so that someone could get a cheap exploration licence. They said it clearly at the meeting," NSW Greens MP David Shoebridge put to Mr Lewis at the inquiry hearing.
Mr Lewis said there were "unsubstantiated allegations" but "it does not mean they were correct."
He did not investigate the allegations because "I did not believe that it warranted investigation".
"All I just want to say is that I did not walk away from that meeting with the belief I was on notice that this thing was dodgy. Absolutely not," Mr Lewis said.
Committee chair and Nationals MP Niall Blair told the inquiry NuCoal's case was that government actions devalued the company's assets leaving shareholders in need of compensation.
"On the other hand, is there an argument to say NuCoal acquired shares in a company and therefore everything that goes with that, along with any liability, and therefore if the shareholders miss out should the shareholders then not be looking at the directors and the due diligence that was carried out from NuCoal to try to find out where they recoup their losses from?" Mr Blair said.
Mr Lantry said he invested in NuCoal on the advice of Morgans stockbroking because "I grew up in the Maitland area and I had seen the coal industry grow and be dominated by multinationals".
"The company had committed to the community by a training mine (supported by) the university and rescue helicopter (service). It was a great story," Mr Lantry said.
"What happened is that I just got so excited about this company, okay? I kept trying to find fault because everything just added up," Mr Lantry told the committee.
Investors were told the company was going to be able to get the coal "out of the ground" for $60 to $70 per tonne when it was selling at $130 a tonne, three coalmines would feed into the mine's infrastructure and coal shipments with the Port of Newcastle "were actually booked", Mr Lantry told the committee.
"The expectation was that this was going to be a valuable company that the likes of BHP or someone would make a takeover for," he told the committee.
The committee was told that independent stockbroker advice to shareholders noted potential risks relating to the Doyles Creek mine licence, but also recommended buying NuCoal shares.
Mr Doyle said he bought 50,000 shares in June, 2010 and another 70,000 in December, 2013 which was "pretty much in the heat of all this", and more than two months after ICAC's findings of a corrupted exploration licence process.
"I thoroughly agree that it was speculative. I wanted that mine to be developed," Mr Doyle told the committee.
The NuCoal share price dropped from a high of about 62 cents in January, 2011, to 35 cents when the ICAC inquiry was announced, about 7 or 8 cents when the ICAC report was released in 2013 and 2 cents a share when legislation cancelled the exploration licence in January, 2014.
Mr Khan said he was "interested in who should be in the pot and who should not be" after the committee was told a United States trade representative had written to the Australian Department of Foreign Affairs and Trade on behalf of American investors in NuCoal.
The letter said the proposed compensation bill was a "potentially suitable way to resolve the matter".
The committee is considering an amendment bill proposed by MP Fred Nile to appoint an independent arbitrator to assess compensation claims.
The committee is expected to report back to parliament in October.
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