Malcolm Johnson is a partner with Anton Tarkanyi in a New Zealand company called Natural Resources Capital Fund limited. Now, a second New Zealand company, known as NRCF resources limited, directed by Anton Tarkanyi is the company that OWNS Canzar resources.There appears to be a solid link between Canzar / Anton Tarkanyi and Malcolm Johnson. This same Malcolm Johnson shares directorship and shareholding of UK registered Supergem Limited with Christopher Page. You may be familiar with Mr Page as a director of many Cityview associated companies including, Fortitude Minerals Services, Zebra Copper etc.
The name “Malcolm Johnson” is not foreign to Mark Smyth. You can read two very compelling articles regarding a previous encounter with a certain Mr. Johnson. The articles are provided as attachments at the end of this passage. We hope that this is not the Malcolm Johnson that is involved in Canzar, and by association with Cityview, but we are prepared for the worst.
We have given Mark Smyth the opportunity to confirm, deny or comment in writing that it is not the same MJ as was involved in the Beach Petroleum and Meridian oil scandal. In the meantime Beach MD Reg Nelson is kindly assisting us with information, as is the lawyer whose firm successfully prosecuted Johnson in the UK. We ask that you not contact either directly, but please pass queries through us, so that they do not get over burdened.
IF this is the same MJ and IF Cityview is yet another Johnson exploit then someone needs to step in NOW. IF it is yet another Johnson exploit then do we have a case of earlier professional directors just rubber stamping what MS tells them to, or even walking away as they didn’t agree with Smyth’s behaviour?
You will now see how absolutely critical the audit/ disclosure resolutions are/were. Unfortunately CVI and their lawyers have converted them to advisory resolutions which give the effect of allowing them to choose what to disclose to you. You will also see why we feel the need for the other shareholder resolutions to be voted for strongly.We urge you, as a Cityview investor, to take a few minutes to read the attached “Burbank” and “Shirerise” articles. These articles are important even if you are not an investor but are interested in records of criminal fraud.
Now – is it possible that there are two different Malcolm Keith Johnsons and the one who was involved in Beach/Burbank and known to Smyth, is NOT the same as the one active in Angola and linked in business with Anton Tarkanyi and Christopher Page? Yes, there is a chance they are different people….As mentioned earlier, we have given Mark Smyth the opportunity to confirm in writing if it is not the same Malcolm Keith Johnson as was involved in Beach/ Burbank, and Meridian oil. Opportunity was given on Friday 16th January, and we will take silence or non response as confirmation that the two scenarios are both the same "MJ"
If it is however, there will be a lot more questions for Mark Smyth to answer.
N.B.All of the below are edited extracts from some very lengthy court documents.
Web addresses are provided should you choose to read the series of documents in full.
Extracts and explanations on some court documents
The BURBANK scheme
In brief outline, the statement of claim goes on to allege that … Mr Johnson, through the Ska Trust and in turn through the corporate structure of Firstway, … progressively acquired small interests in the North and South Burbank Units which .. totalled almost 47% of the North Burbank Unit and 6.1% of the South Burbank Unit. The consideration paid was slightly less than US$3.6 million, which sum was almost entirely advanced by Claremont as loans. It is pleaded that the true value of the interests was in the order of US$3.6 million or, more probably, between nil and US$2.4 million. The price was then ramped, and the interests sold at Mr Johnson's direction to Beach. It is alleged that this scheme ("the Burbank scheme"), as developed and implemented by Messrs Johnson, Fuller, Cummings, and Main included a number of objectives. At its inception, a principal objective was to use the over-value to conceal the illegal use of the deposits. The over-value would provide funds to cover the IRL borrowings and free the deposits. In addition, the over-value would provide much needed funds for companies in the IRL group and Mr Johnson. The pleadings allege that … before 14 March 1991, new Beach Petroleum directors arrived at the conclusion that the Burbank transactions had been fraudulent, and that the Charge and Option Agreement and all associated transactions were unenforceable.
More detail and introduction of Meridian oil ( Mark Smyth - director)
At material times …. Independent Resources Limited ("IRL") effectively controlled a group of companies including the applicant (Beach petroleum) and including Independent Resources (Asia) Group Pty Ltd ("IRAG") and Spargos/Enterprise /Jingellic. From 5 January 1988 the Meridian board was controlled by people from the IRL camp. Meridian Oil NL was involved in some of the events.
The (Beach Burbank) acquisition occurred as a result of the exercise … of an option …. between the applicants and Firstway Limited , a company incorporated in the Republic of Liberia whereby, for a consideration of US$28 million, Beach acquired from Firstway …. all the issued capital of Burbank Petroleum Company ("BPC"), and other associated companies.
Mr Fuller as a director and Mr Johnson as a deemed director of Beach caused Beach to enter into the Heads of Agreement dishonestly and fraudulently, in breach of their fiduciary duty to Beach and Claremont.
In June 1989, when the Charge and Option Agreement was entered into and the option exercised, Michael John Fuller, Mr Cummings and Paul Christopher Macdonald Main were the directors of each of the applicants and IRL The statement of claim alleges that through these board positions, Messrs Fuller, Cummings and Main procured companies in the IRL group to obey their instructions.
Malcolm Keith Johnson, was at one time in business in Adelaide, but left Australia in the early 1980s following bankruptcy and a conviction in the Supreme Court of South Australia on a corporate fraud charge. Throughout this period, Mr Main was engaged by Mr Johnson to assist him in the conduct of his business affairs. The evidence shows that Mr Main was Mr Johnson's right hand person who closely followed Mr Johnson's instructions. Mr Main joined the board of Meridian on 10 August 1988 and became a director of many IRL group companies in May and June 1989.
Messrs Fuller, Cummings and Main as directors, and Mr Johnson as a deemed director of Beach and Claremont, caused Beach to enter into the Charge and Option Agreement and to exercise the option knowing that the true value was not more than US$3.6 million, without first undertaking any proper due diligence, knowing the transaction was not at arms length but between parties controlled by Mr Johnson, and in disregard of valuation advice by Mr Dene Rogers, the senior petroleum engineer employed by Claremont. In doing so, Messrs Fuller, Cummings, Main and Johnson acted dishonestly and fraudulently, in breach of their fiduciary duty to Beach and Claremont, and in breach of s.229 of the Companies (South Australia) Code, with the intention of depriving Beach of the difference in value between US$28 million and the real value of the Burbank interests and to make those funds available for the benefit of Firstway, IRL, IRAG, Messrs Johnson and Fuller, and SEJ, and are therefore liable for the loss suffered by Beach. The losses claimed include the overvalue in the ramped acquisition price, expenses paid in connection with the transaction and compound interest.
4. THE RESPONDENTS' CASES
The allegation of control of the respondent companies by Mr Johnson was at first disputed by all respondents, but as the applicants' evidence unfolded, the attitude noticeably changed. By the end of the evidence Spargos and Enterprise accepted that position, and supported the proposition that Mr Johnson was "the master puppeteer" who, with the assistance of the other individual respondents, acted in fraud with the effect of causing loss to every one of the companies. Spargos and Enterprise accept that the directors of Beach were guilty of breach of fiduciary duty in relation to Beach in May and June 1989 in respect of the Burbank transaction, but do not admit that a conspiracy as alleged by the applicants occurred. The above is an edited version. The full version is available at: http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/FCA/1993/283.html?
The SHIRERISE scheme
http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/FCA/1993/283.html?
Paragraphs 147 to 152 and 328 on Burbank “Shirerise” scheme - Part 1
On 15 June 1988 Mr Brooke, on instructions from Mr Johnson, wrote to Meridian offering to sell oil, gas and coal properties owned by Shirerise, a company controlled by Mr Johnson The net figure sought was US$3.75m but the letter suggested that the payment be made in Australian dollars. A telegraphic transmission of A$4.5m made on that day 15 June 1988 was described as a "deposit". By letter dated 16 June 1988, Mr Greenham, on behalf of Meridian, purported to accept the offer. conditional upon confirmation of title and independent valuations to support the acquisition. If those conditions were not met within three months, the acceptance stipulated that the deposit was to be repaid with interest. The accounting period for Meridian closed on 31 December 1988.
It seems to have been realised by one of the directors, Mr Fleming, that the transaction involving the payment of A$4.5m on 15 June 1988 by Meridian purportedly to Shirerise for the purchase of assets had not been completed. On the contrary, it had become clear in the months following September 1988 that Shirerise was unable to give title to the oil assets. An urgency arose to record and explain the advance of A$4.5m. It seems that Mr Fleming then requested Joelson Wilson and Co to arrange to have BBR forward another letter of offer backdated to 15 June 1988 differently describing the assets. An alternative proposal was suggested, it is not clear by whom, namely that the payment of A$4.5m be treated as an advance to one of the Ska Trust companies involved in the Burbank transaction in consideration for an option to acquire an interest in Burbank. This was achieved through a loan and option agreement from Firstway over a proposition of the Burbank interests and Meridian under a further (backdated) option, ultimately acquired an interest in the Qualls gas prospect in the USA for A$4.568m. The vendor in that transaction was Burbank Hydrocarbons Limited, yet another Johnson controlled Ska Trust Company.
In the annual report for Meridian for the year ended 31 December 1988, which was signed off on 31 March 1989 by the directors and auditors, the directors noted: "Meridian Oil NL has entered into an Agreement for an option over a significant equity in a large USA producing oil field. This oil field, the exact details of which the company has agreed to keep as proprietary information, possesses proven reserves of some 42 million barrels of oil. It is currently in production producing approximately 800,000 barrels of oil per annum. An amount of A$4.5million approximately has been advanced to secure this option."
Burbank “Shirerise” scheme - Part 2
http://www.austlii.edu.au/cgi-bin/sinosrch.cgi?method=auto&meta=%2Fau&mask_path=&mask_world=&query=meridian+oil+nl+smyth&results=50&rank=on&callback=off&legisopt=&view=relevance&max= http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/wa/WASC/2003/49.html?query=^meridian%20oil%20nl%20smyth
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA IN CHAMBERS
CITATION : MERIDIAN OIL NL-v-SMYTH & ORS [2003] WASC 49
BETWEEN : MERIDIAN OIL NL Plaintiff AND PETER MARK SMYTH First Defendant
It is alleged that the first defendant (Mark Smyth) was a director of the plaintiff (Meridian Oil) at the time of the Shirerise Agreement.
It is further alleged that the first defendant (Mark Smyth) wrote a memorandum in which it was said that if a proposed rights issue was to be "scaled down" then projects such as Shirerise and another had to be "eliminated". This reference to Shirerise is somewhat confusing. Shirerise is defined in par 3 of the minute to be Shirerise Petroleum. In par 23 there appears a definition of the Shirerise Agreement and the Shirerise Property..
The "Shirerise Agreement" was an agreement between the plaintiff (Meridian) and Shirerise Petroleum Ltd, pursuant to which the plaintiff was to acquire from Shirerise "alleged" oil and gas interests and freehold land in the United States of America. "The Scheme" is defined in par 54 of the minute. That paragraph reads as follows:
"In or about late October 1987, Johnson, Burney and Fuller agreed for IRL and the Ska Trust to complete the acquisition of effective share and board of control each of Claremont, Beach, Coronet and Spargos, and to use those companies' cash reserves and assets by one means or another to repay the ACC Loans.
"These paragraphs are pleas respectively that the Claremont Sum was used to benefit one Johnson to the detriment of the plaintiff ( Meridian) and the purpose of the Claremont Agreement was to obtain the Claremont Sum to be used to assist Johnson to secure control of ClaremontBoth subparagraphs refer back to par 57 and 57A. Taken in conjunction with those two paragraphs, they lead to a conclusion based upon the pleading that Mark Smyth knew that the Claremont Sum was to be used to benefit Johnson and to the detriment of the plaintiff, and that the purpose of the Claremont Agreement was to assist Johnson to secure control of Claremont. Paragraph 79 can stand."
Smyth's knowledge of the purported Shirerise Agreement is to be inferred from the following:
(a) he co-operated with Johnson and Burney in achieving objectives of the Scheme as pleaded in paragraph 57.
"Paragraph 57 is a plea that the first defendant Mark Smyth knew Johnson was seeking to secure control of Spargos and Claremont. In my view, all of these matters taken together amount to a proper plea.
There is a further objection raised to subpar 97(f). That subpar pleads that the first defendant ( Mark Smyth) breached his equitable duty of care to the plaintiff in that he failed to take any steps to recover certain payments from Firstway and others.
It is said by the first defendant that none of the material facts pleaded in par 36 through to par 63 unequivocally demonstrate dishonesty on the part of the first defendant. However, what the plaintiff says is that, taken together, these paragraphs demonstrate a dishonest intent on the part of the first defendant from which fraud can be inferred. Put another way, the plaintiff says that the irresistible inference from the events pleaded is that the first defendant had a dishonest intent. 4 To examine the respective positions of the parties it is necessary to look at the allegations of fraud made by the plaintiff and the facts pleaded to support that allegation. By par 63(a) the plaintiff alleges that by causing, permitting, ratifying or authorising the plaintiff to pay the Sum, the first defendant was fraudulent by:
(1) failing to obtain security from Shirerise;
(2) making no enquiries as to the bona fides of Shirerise;
(3) failing to ensure an agreement protecting the plaintiff was executed before payment of the Sum;
(4) causing or permitting the payment of the Sum.
It is said that this cannot be inferred. But the plea made by the plaintiff is one of material fact. At trial it will be necessary for the plaintiff to establish that the first defendant failed to take any steps to recover the various amounts.
It is not an easy matter to give a concise and intelligible summary of the cause of action brought by the plaintiff against the first defendant. This can perhaps be illustrated by saying that the present statement of claim runs to 77 pages and 120 paragraphsWhat does emerge from the pleading is that the plaintiff suffered a considerable reduction in its assets during the period when the first defendant was one of its directors. In particular, the plaintiff suffered a significant loss as a consequence of the Shirerise transaction. The first defendant further says that without access to documents held by the plaintiff, he is unable to offer a greater insight to his defence to the claims put against him. first defendant's position is somewhat unsatisfactory. Insofar as he says anything, he seems to be saying that if any improper conduct occurred in relation to the Shirerise transaction, he had no knowledge of it - that despite the fact he was a director. That refrain has a somewhat familiar ring.
9 There is one aspect of the evidence which is deeply troubling. The case pleaded against the first defendant alleges a close association between him, one Malcolm Johnson ("Mr Johnson"), and the fourth and fifth defendants. Mr McDougall details a meeting he had in London with the first defendant in or about August 1988. The tenor of the evidence is that there was a comfortable working relationship between the first defendant, Mr Johnson, and the fifth defendant. In other words, the evidence of Mr McDougall directly contradicts what was said by the first defendant in par 15(a) of his affidavit.
Faced with Mr McDougall's affidavit, the first defendant filed a further affidavit sworn 20 August 2003. Paragraph 10 of this affidavit is, in my view, vague and evasive. but it does establish that the first defendant knew and had business dealings with Mr Johnson. In other words, par 15(a) of the earlier affidavit was wrong. No explanation is provided by the first defendant as to how it is that he made the mistake in his earlier affidavit.
I asked Senior Counsel for the plaintiff if he could give an estimate as to when the matter might be ready for trial and how long any trial might take. Counsel was not in a position to answer either of these two questions with any certainty. He was not able to say when discovery by the plaintiff might be complete. What he did say was that he anticipated that the trial could take place in 2008 and that it would take "more than a month".
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