|My mail to Martin Mount. He's decided to play the silent cool guy, which means you get to see how aggressive I was with him. Though this mail seems a little out of date, what with the foolish move made by MIRL on Saturday and its fallout, here's what I wrote to Martin Mount on Thursday, couple of minor typos and all:|
Dear Mr. Mount,
The Minera IRL Concerned Shareholder group, of which your correspondent is one of around 85 members, has been anxious to reach out to you, in order that you understand the issues that have come to light around the company in the last four months. We are concerned that you have accepted the nomination to be the new director of the company without fully understanding said issues. For the sake of brevity, the mail outlines only some of the issues that cast doubt on the governability of the company. We are concerned that you may inadvertently expose yourself to serious consequences arising from the decisions, actions and inaction of MIRL's board of directors without fully understanding what has happened in the company to date.
On July 27th 2021, the company announced the appointments of (quote NR) "...Steven Ngatai as Vice President of Projects, Susan Gabbie as Chief Communications Officer, and Pedro Valdez as Vice President Investor Relations. All of the appointments are effective as of August 1, 2021." Later in the NR, MIRL director and CEO Diego Benavides referred to the appointments as "...a world-class team of seasoned leaders with broad operational experience and expertise....". It quickly became clear that this was not the case. In fact, none of the three people hired have the required qualifications for VP-level roles and only one of them, Mr. Ngatai, had any serious or relevant experience in the mining industry. In fact, all three are personal friends of CEO Benavides and his sentimental partner, Patricia Kent, a fact that becomes relevant when we consider the motives behind the decision to hire Susan Gabbie, Steve Ngatai and Pedro Valdez.
If required, we would be happy to give details of the motive behind the decision to hire Susan Gabbie, Steve Ngatai and Pedro Valdez in their original roles at a later date. In this mail we keep to basic facts. Suffice to say it was an attempt to pull to wool over the eyes of shareholders, and the Canadian brokerage Haywood, hired by MIRL in early 2021 to market the company to potential funders or buyers of company assets or projects. Haywood, on noting the lack of C-suite experience at the company, advised CEO Benavides to strengthen the company C-suite and though he attempted to hire suitable talent, no professional worth their salt would go near the company. Instead, he hired personal friends Susan Gabbie, Steve Ngatai and Pedro Valdez, in a "Potemkin Village" style representation of C-suite depth.
To that point, the corporate wrongdoings may have been limited to the C-suite level, but at the end of the 3q21 reporting period the board of directors became actively complicit in the deception. The given job titles Susan Gabbie, Steve Ngatai and Pedro Valdez at the time of hiring meant the company had to justify their appointments to the relevant stock market authorities, but as they do not have the CVs or experience necessary, just days before the end of the 3q21 reporting period the board of directors resolved to change their job titles to "manager" or similar, allowing them to fly under the radar of market authorities. Instead of doing their job of of control and oversight of CEO Benavides, the board became complicit in the deception which continues to this day. The mere fact CEO Benavides hired personal friends to high-paying jobs for which they are unqualified in such a deceptive manner would be enough for any reasonable board of directors to fire the company CEO with cause. Instead, the MIRL board entered into complicity with CEO Benavides and ignored its fiduciary duty to shareholders in the attempt to cover up his wrongdoings. The above is an easily demonstrated fact, however and sadly it is only the tip of the iceberg when it comes to board complicity with CEO Benavides.
With corporate wrongdoings now on display, further investigation revealed a host of other alleged wrongdoings at the company, many with clear prima facie evidence to support the allegation which, more often than not, concern large and long-term dollar payments made to family members and close personal friends of CEO Diego Benavides that add up to many millions of dollars over an extended period of time. Again, we can supply details of these allegations at your request but for one example, it was discovered that one of the wholly-owned subsidiaries of the company had been making payments to the sentimental partner of Diego Benavides, i.e. Patricia Kent, on a monthly basis ever since she formally left the company in 2014. Separate payments of the same style have been made to Diego Benavides' son, his son-in-law and others in his close personal circle. Most these payments were made via "consultancy fees" to anonymous (or anonymous sounding) third party entities without the knowledge of anyone outside the wholly-owned subsidiary, not least the shareholders of Minera IRL.
With these allegations now in the light, shareholders pressured the board of directors who eventually promised action, telling us they would conduct an internal audit to discover whether the allegations were true. The company uses standard SAP technology accounting software that would provide any reasonable forensic accountant full details of all financial movements in a matter of days. Instead, shareholders have waited through September, October and now November for word on the results of the company's internal audit, all to no avail. We are now in the voting period for the AGM and one of the resolutions is to re-hire Diego Benavides as CEO. As the central focus of the internal audit is CEO Benavides, shareholders are now expected to vote on the resolution to re-hire Diego Benavides without knowing the results of the audit.
We require answers from the company and its board and it is not for the lack of trying. Though the two issues outlined above are by far from the only alleged wrongdoings that have recently come to light, the management, C-suite and board have refused to answer the most basic of questions posed to them by multiple shareholders. All phone calls go unanswered, mails with specific questions are answered in general platitudes that deliberately avoid the questions, texts and social media messages are completely ignored. The same blanket refusal to reply to shareholder inquiries is used on any and all shareholders, with a CEO permanently unavailable for comment, an Investor Relations manager who does not relate to investors in the slightest and a Communications manager who ignores phone calls, voicemails asking to return calls, e-mails from shareholders, etc etc.
This attitude extends to the board of directors, some of whom occasionally reply but only with the same type of general platitude that fails to answer the most basic of questions posed to them. The concerned shareholder group is forced to conclude that the board of directors is actively attempting to cover up for the deeds of CEO Diego Benavides and has become complicit in a whole host of alleged improper activities, some of which being serious financial misdeeds with clear prima facie evidence. To cut a long story short, the lack of fiduciary duty on display by the board of directors at Minera IRL is nothing short of breathtaking and you, as a nominated director, are exposing yourself to this if you continue and succeed with your nomination to the board of directors at Minera IRL.
The above outlines just some of the improper activities that have happened at Minera IRL recently. Sadly, there are many more examples of wrongdoings and misdeeds, including but by no means limited to the illegal use of private correspondence from shareholders and the illegal monitoring of shareholder social media (aka "chuponeo", as they say in Peru) by employees and associates of Minera IRL. We Concerned Shareholder group would be pleased to give full details on any or all of the above issues, as well as further details of other improper behaviour by MIRL employees, C-suite members, directors and their legal counsels that has come to light since our concerns began. We have nothing to hide from you, Mr. Mount, an attitude that is the 180° opposite to that of the Minera IRL board of directors.
We are concerned that you have been offered the opportunity to join as a director of Minera IRL under false pretenses and the company officers and directors have withheld many facts that would put you under serious legal jeopardy and/or liability if you were to join the board of directors, as from December 14th 2021 and the company AGM. As a nominated director, we believe you have the right to make your decision based on as much evidence as possible, which is the reason we have reached out to you this week on multiple occasions and why this mail exists. To end on a personal note, it so happens that by coincidence, both you and I are British citizens and also residents in Peru. We are both aware of the legal liability that entails, as both you and I are subject not just to the laws of Peru, but also the crown laws of our country of origin. I have always held the laws of both Peru and the UK in the highest esteem and, considering your long experience in the mining sector and high reputation inside Peru as an upstanding corporate and private citizen, I am sure your attitude toward the laws of both Peru and The UK, sir, is the same.
Member of the Minera IRL Concerned Shareholder group