Kimberley Diamonds Facing Probe After Ellendale Mine Closure

- July 16th, 2015

The West Australian reported that the Australian Securities and Investment Commission has launched an investigation into Kimberley Diamonds Ltd. (ASX:KDL).

The West Australian reported that the Australian Securities and Investment Commission has launched an investigation into Kimberley Diamonds Ltd. (ASX:KDL).
Earlier in the week, news surfaced that workers at the company’s Ellendale mine were owed over $5.3 million when the operation was sent into voluntary administration in June. Ellendale was operated through a subsidiary of Kimberley Diamonds, and according to The Motley Fool, the voluntary administration doesn’t apply to the rest of Kimberley Diamonds, including its other subsidiaries.
As quoted in the market news:

The [$5.3-million] figure includes more than $882,000 in unpaid wages, accrued entitlements, superannuation and redundancy pay.
[Administrator] Jirsch Sutherland said it was now investigating payments made to KDL and other related parties over the past year, as well as potentially voidable transactions with suppliers and others.
Creditors were told last week that Australian Securities Exchange-listed KDL had lodged a $1.9 million security over Ellendale’s assets only a month before the subsidiary was put into administration.
It is believed the charge relates to an inter-company loan worth $8 million at the end of June 2014. Creditors last week asked the administrators to examine when and how the $6 million balance was repaid to KDL.
Jirsch Sutherland is still preparing its report to creditors on the circumstances of Ellendale’s collapse, but it is understood the Australian Securities and Investments Commission has already contacted investors who had complained about KDL to regulators last year.

Click here to read the full report from The West Australian.

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