OSC rules out Westfield hearing

A group of Westfield Minerals (TSE) minority shareholders are examining their options now that the Ontario Securities Commission (OSC) has elected not to conduct a hearing into the 1989 sale of Westfield’s mining assets to Northgate Exploration (TSE). The OSC was persuaded to review the sale after a number of Westfield minority shareholders complained that the assets sold to Northgate for $39 million were undervalued. The minority shareholders claim the assets, which included a 35% interest in the Choquelimpie gold mine in Chile, should not have been sold without their approval.

In a recent statement, the OSC said it would not be initiating proceedings because the transaction is being reviewed by Frederick Sparling, the director appointed under the Canadian Business Corporations Act (CBCA).

Other reasons cited by the OSC include the existence of shareholder rights of action that exist under the CBCA which are not available under the Securities Act, and disclosure isnow available to Westfield shareholders.

However, Michael Cahill, a member of the minority shareholders group, said he is encouraged by the OSC’s promise to participate in any action that Sparling decides is appropriate.

“We will have a meeting next week with our lawyers and have a good look at the situation,” Cahill told The Northern Miner.

Part of the opposition to the sale, which essentially turned Westfield from a mining to a cash-rich holding company, is based on the fact that Westfield is controlled by Hees International Bancorp.

Through Trilon Financial Corp., Hees also owns 18.9% of Northgate. In their defence, Northgate and Westfield President Danesh Varma have always maintained that Westfield shareholders still hold an indirect interest in the mining assets through the company’s 15% stake in Northgate.