Silicon refinery directors in strife

Directors of a company planning to establish a silicon refinery in Southland could be facing criminal charges for fraud in South Africa.

Andrew Cecil, Kevin Watson and Ronald Creasy are all involved with companies the South African government spent two years investigating.

It has since been recommended that criminal prosecution of directors of the companies be considered as well as possible recovery of investors' funds by the National Prosecuting Authority.

One of the companies involved is Resourcefin Strategies International Ltd (RSI). It is the largest single shareholder in Commonwealth Resources, of which New Zealand company Silicon Metal Industries (SMI), is a subsidiary. The men are also directors of SMI.

SMI holds a current exploration permit to search for silica at Pebbly Hills and more than 70 New Zealand-based individuals are listed as shareholders in the company.

Christchurch-based SMI director and chairman Michael Hawarden said yesterday he was aware of the developments in South Africa but had not notified New Zealand-based shareholders.

"Allegations have been made and I've seen the response of those involved," he said.

"They repudiated all allegations and no prosecutions have been brought. I've been advised if they attempt any prosecutions they will be rigorously defended."

There were inaccuracies in the report, he said.

"Until there's a grain of truth in what is alleged there and even if there is (now), it will not have any impact on what we're doing here."

He would continue monitoring events in South Africa, he said.

Mr Hawarden is a South African citizen with permanent residency in New Zealand. In 2007 he retired after eight years on the board of Solid Energy.

The South African investigators found RSI and associated companies failed to provide financial statements to shareholders and that the bulk of money invested in the companies was paid out to either directors or brokers.

Mr Hawarden said SMI was continuing its work in Southland and remained positive about the project's future, despite facing challenging economic times.

"The potential we believe is inherent in this project we believe is still there and worth pursuing," he said.

Venture Southland manager enterprise and strategic projects Stephen Canny said his organisation was testing of the quality of the silicon deposits in the area to determine future uses.

- © Fairfax NZ News