Sundance fights air crash lawsuit

SUNDANCE Resources has vowed to vigorously defend a pair of "bitterly disappointing" lawsuits lodged against it by family members of the directors who were killed in an African plane crash.

By InvestSMART · 23 Jun 2012

By InvestSMART ·
23 Jun 2012

Comments

SUNDANCE Resources has vowed to vigorously defend a pair of "bitterly disappointing" lawsuits lodged against it by family members of the directors who were killed in an African plane crash.

Revelations that legal action had been started in two countries came on the same day that controversial Chinese group Hanlong was given approval by Australian regulators to push ahead with its takeover of Sundance.

The entire Sundance board chairman Geoff Wedlock, chief executive Don Lewis, company secretary John Carr-Gregg and non-executive directors Ken Talbot, John Jones and Craig Oliver were among 11 people who died in June 2010 when a light aircraft crashed in the Republic of Congo.

The plane had been hired by Sundance Resources, as the directors were there to inspect African resources projects.

Wives and family of the dead excluding the Oliver and Talbot families have launched legal proceedings in Cameroon, and are expected to begin proceedings soon in the US state of Illinois.

The Cameroon action has been served on Sundance's 90 per cent-owned subsidiary Cam Iron SA, and there are four other respondents including an aviation instrument manufacturer in the US state of Kansas.

The US legal process is expected to be largely the same but is expected to include Sundance Resources as a respondent. Both claims are for unspecified damages.

Sundance chairman George Jones who came out of retirement to run the company in the wake of the crash told BusinessDay that several wives of the deceased directors were involved in the claim.

"I personally am bitterly disappointed they are doing this," he said. "The company has made a very substantial payment to the wives, and we do not believe the claim is justified.

"The draft report [of the investigation into the crash] that I've seen indicates that it was pilot error."

The court action is unfortunate timing for Sundance, which recently passed an important agreement with the Cameroon government to push ahead with development of the Mbalam iron ore project.

That project is highly prospective, and has brought Sundance to the attention of foreign investors such as Hanlong.

Approval from Chinese authorities is all that stands between Hanlong and its proposed takeover of Sundance, following yesterday's approval from Australia's Foreign Investment Review Board.

FIRB gave the green light despite recent insider trading accusations being levelled against several Hanlong executives.

Sundance shares finished 2.5? higher at 36?.

Go to Google News, then click "Follow" button to add us.

Share this article and show your support

Frequently Asked Questions about this Article…

What legal action is Sundance Resources facing and where were the lawsuits filed?

Family members of directors killed in a June 2010 plane crash have launched legal proceedings against Sundance-related parties. Lawsuits have been served in Cameroon (against Cam Iron SA, a 90% owned Sundance subsidiary, and other respondents) and are expected soon in the US state of Illinois. The US action is expected to include Sundance Resources as a respondent.

What are the lawsuits claiming and how much are the damages?

The lawsuits are claims for unspecified damages related to the plane crash that killed several Sundance directors. The article does not state a dollar amount, so the potential financial exposure remains unspecified.

How has Sundance Resources responded to the crash-related lawsuits?

Sundance has vowed to vigorously defend the actions. Chairman George Jones described the suits as 'bitterly disappointing,' said the company has already made a substantial payment to some of the wives, and indicated the company does not believe the claims are justified.

Did the company say what caused the plane crash that prompted the lawsuits?

Chairman George Jones said a draft report he has seen indicates the crash was due to pilot error. That is the comment reported in the article.

How might these legal proceedings affect everyday investors in Sundance Resources?

For investors, the immediate impacts are uncertainty and potential legal risk because claims are outstanding and damages are unspecified. The suits coincide with key project and takeover developments, so investors should watch company announcements and regulatory filings for updates on legal exposure and any financial disclosures.

What is the status of the Hanlong takeover of Sundance Resources?

Australia’s Foreign Investment Review Board gave Hanlong approval to proceed with its proposed takeover of Sundance. Approval from Chinese authorities is still required and remains the last regulatory step mentioned in the article.

Are there other controversies involving Hanlong that investors should know about?

The article notes that insider trading accusations have been levelled against several Hanlong executives, but despite those accusations, Australia’s FIRB still approved Hanlong’s proposed takeover of Sundance.

How could the lawsuits affect the Mbalam iron ore project and Sundance’s future prospects?

The court action comes at an unfortunate time for Sundance, which recently reached an important agreement with the Cameroon government to advance the Mbalam iron ore project. The project is described as highly prospective and has attracted foreign interest such as Hanlong’s. Legal distractions or liabilities could complicate development timing or investor sentiment, though the article does not provide specific financial or operational impacts.