The Department of Justice filed charges against members of the board of directors of Mt. Labo Exploration and Development Corp. who served from 2011 to 2015 for alleged violation of Section 2 of Commonwealth Act No. 108, or the Anti-Dummy Law.
The board was led by RTG Mining Inc. chief executive Justine Alexandria Magee and board member Matthew Gordon Syme.
The DOJ’s decision stemmed from a complaint filed by the National Bureau of Investigation upon prior sworn complaint by Galeo Equipment Corp.
“We welcome the DOJ’s decision in indicting the former directors of Mt. Labo for violation of the Anti-Dummy Law. This supports Galeo’s quest for vindication in the Mabilo project and its aim to achieve justice and equity,” said Angelo Par, head of legal and compliance department at Galeo.
The charges were filed and raffled to Branch 133 of the Makati City Regional Trial Court.
RTG, Mt. Labo’s associate company, identified Mt. Labo’s Mabilo project as its next development project. It is a mining and exploration company listed on the main board of the Toronto Stock Exchange, the Australian Securities Exchange and the OTC Pink Market.
The DOJ identified other former members of the Mt. Labo board as Johannes Martinus Raadsma, Maximo Sara III, Martin Sara, Benedicto Bulatao and Crispiniano Acosta.
It said records show that the capital stock of Mt. Labo from 2011 to 2015 was simulated to make it appear that at least 60 percent of Mt. Labo was owned by Filipino citizens. It said many indications of foreign ownership and control over Mt. Labo existed that would merit the application of the stricter Grandfather Rule, which traces both the direct and indirect shareholdings in the corporation to determine actual Filipino ownership.
The DOJ said there was a glaring similarity in the corporate structure and the nominal shareholders of Mt. Labo and its mother company, St. Ignatius. SRM Gold Limited, a foreign corporation incorporated in the British Virgin Islands, also owns 40 percent of St. Ignatius aside from its 40-percent shareholdings in Mt. Labo, it said.
The DOJ said St. Ignatius also did not pay for its shareholdings in Mt. Labo. Sierra Mining Limited, which owns 100-percent of SRM, admitted in its 2011 interim financial report that it paid the consideration for SRM’s 40-percent and St. Ignatius’ 60-percent stake in Mt. Labo.
It said Mt. Labo disclosed in its 2013 audited financial statements that Sierra and SRM made cash advances to fund its exploration activities. SRM also provided practically all the technological and technical support for Mt. Labo, the DOJ said.
It said from 2011-2015, Mt. Labo was not compliant with the minimum Filipino ownership as the total foreign ownership in the company at that time was 64 percent, comprising of a direct interest by SRM of 40 percent plus 24-percent indirect ownership through St. Ignatius.
The DOJ also filed charges against Michael Carrick, chairman of RTG Mining Inc., for alleged violation of Section 2 A of the ADL when Mt. Labo reportedly allowed him to intervene in the control of Mt. Labo. This resulted in the removal of the nominee directors of Galeo Equipment Corp.
The case also included RTG Mining employee Mark Turner who was accused of conspiracy with the board of directors of Mt. Labo.