The $220 Million lawsuit alleges that a biggest shareholder hedge fund called Audley European Opportunities Master Fund Ltd- boosted their stakes in Western Coal and made hundreds of millions when coal prices increased and the shares bounced back.
Western Coal Corp. artificially drove down its share price to allow certain investors and insiders to make millions.
The lawsuit alleges that a major shareholder, Britain-based Cambrian Mining PLC, and one of Cambrian’s shareholders, a Guernsey-registered hedge fund called Audley European Opportunities Master Fund Ltd., boosted their stakes in Western Coal and made hundreds of millions when coal prices increased and the shares bounced back.
Audley injected $30-million in convertible debentures, which were worth $430-million when the company was taken over last year at $11.50 a share, the plaintiffs state in court documents.
A lawyer for Audley responded in a court submission that the hedge fund was forced to come “to the rescue” of Western Coal during its “financial storm,” and the fund had been “shocked” by Western Coal’s financial results.
Three Western Coal directors also bought shares the week after the bad results came out, the lawsuit alleges. $220M Lawsuit Western Goal Artificial Share price Manipulation For Hedge Fund Profits
Audley European Opportunities Master Fund is a Guernsey-based hedge fund which is managed by London’s Audley Capital. In 2008, the Master Fund was the biggest single shareholder in Cambrian Mining PLC and fifth largest shareholder of African Minerals Plc
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