MagIndustries
| Company type | Private company |
|---|---|
| Industry | Mining |
| Founded | 1997 |
| Headquarters | Toronto, Canada |
| Website | None |
MagIndustries is a Canadian mining company majority owned by a Chinese shareholder.
History
The company was established with the primary purpose of developing the Mengo potash project in the Republic of Congo.[1] The company also had a number of sideline investments including its MagForestry division formed through transactions made in 2005-6 resulting in the acquisition of a 68,000 hectare eucalyptus plantation, located mostly on the surface of areas where the company held mineral rights.[2]
Throughout the 2000s and early 2010s the company sought a strategic buyer that would be able to invest the estimated US$1 billion necessary to develop the mine.[1] In 2009 it was in talks with Chinese state owned enterprises Sinohydro and Complant but those talks fell through. The company announced an investment in late 2010 with investment company TSC Capital but the proposed deal was terminated.[3] In 2011, a Chinese private company, Evergreen Industries Group, purchased 76% of the shares of the company for $115 million.[1] After the acquisition, the company was kept listed on the Toronto Stock Exchange. An executive of the company in public remarks found that Western investors were not familiar with the Republic of Congo and put off by risks of the location and so avoided investing in the company.[1]
The company was investigated by the Royal Canadian Mounted Police for making corrupt payments to Congolese officials. The RCMP raided the Toronto office of the company in January 2015. The company began an independent investigation after the raid and in June 2015 the investigation presented allegations that the company had made payments and given gifts to Congolese officials. Among the allegations presented were five payments ranging from US$5,000 to US$51,000 to Congolese officials, a house built for a government official, and gifts from furniture and ornamental stone lions to 4x4 vehicles. The company was unable to fund a continuation of the internal investigation and the controlling shareholder Evergreen Holding Group refused to provide the funds. The corruption investigation and lack of funding sent the company into disarray. The company stopped filing financial reports and the stock ceased trading on the TSX. By June 2015, the board of directors involved in the corruption investigation resigned and the chief financial officer was removed.[4]
References
- ^ a b c d Koven, Peter (April 20, 2011). "MagIndustries taken over by China's Evergreen". Financial Post.
- ^ "MagForestry Division of MagIndustries Acquires 100% Control of Congo Eucalyptus Operation". Market Wired. August 10, 2006.
- ^ "MagIndustries shares plummet after TSC Capital cancels investment". Mining Capital. February 11, 2011.
- ^ "MagIndustries Corp reveals evidence that subsidiaries allegedly paid major bribes in Republic of Congo". Financial Post. June 17, 2015.