Khan gets its way in out-of-court settlement

Khan Resources (KRI-T) scored a legal victory as it came to terms with former business partner Wallace Mays just before its Oct. 12 hearing before the Ontario Superior Court.

The court was set to decide on a motion brought by Khan shareholder Anthony Weldon, who was arguing that Mays act of transferring Khan’s key Mongolian assets over to Mays’ company, WM Mining, was prejudicial and unfairly disregarded the interests of the Khan shareholders.

While Khan took Mays to court directly in the summer of this year, the Ontario court ruled at the time that it didn’t have jurisdiction to rule on assets that were in Mongolia.

The Weldon suit came as another tactic to thwart Mays and it has proven successful.

While all the terms of the agreed upon settlement were not disclosed, it is known that the agreement bars Mays and WM Mining from relying on letters in which Mays purports to transfer the mining assets out of Khan; dealing with or interfering with the mining assets; and making any statements to the media, financial institutions, the Ontario Securities Commission or any government or regulatory authority anywhere in the world, suggesting that Mays or WM Mining is the owner of any interest in the mining assets.

The agreement does not affect Mays separate case against Khan in which he claims he was misled into selling away shares of Khan Bermuda to Khan Ontario (which is now Khan Resources). Khan Bermuda was wholly owned by Mays and was the former holder of the Mongolian Assets.

Mays initially signed over the majority of the shares to Khan Resources to secure financing for the assets, and while the deal left Mays with a significant percentage of the total shares at the time, that percentage was significantly diluted as Khan went about raising money by issuing more shares.

Khan’s shares remained unchanged on Oct. 13 in Toronto. They were trading at $1.35 on roughly 110,000 shares.