Australia's corporate watchdog has launched Federal Court proceedings against former market darling AVZ Minerals and two of its directors, alleging serious disclosure failures concerning the company's massive lithium discovery in the Democratic Republic of Congo.
Legal Action Over Manono Project Disclosures
The Australian Securities and Investments Commission filed fresh legal action on Tuesday, accusing the delisted mining explorer of failing to keep investors properly informed about escalating legal disputes surrounding its Manono lithium project in central Africa.
ASIC Deputy Chair Sarah Court emphasised the importance of transparent corporate reporting, particularly for operations in remote international locations. "In this case it was all but impossible for retail investors to travel to an overseas location in central Africa, in which the company's operations are being conducted," Ms Court stated.
Directors Face Breach of Duty Allegations
Managing director Nigel Ferguson and technical director Graeme Johnston have both been named in the legal action. ASIC alleges the directors breached their duties and authorised ASX announcements that were false or misleading concerning AVZ's operations and legal challenges.
"Investors rely on the company to provide accurate and timely information. We allege Mr Ferguson and Mr Johnston failed to inform investors of the ongoing issues in this matter for nearly 12 months," Ms Court said in an official statement.
Years of Turmoil Culminate in Legal Action
The regulatory pursuit follows years of intense disputes over ownership rights to what was touted as one of the world's largest lithium deposits. AVZ had reached a market capitalisation of $2.7 billion before its shares were suspended in May 2022, leaving investors trapped in a company that hasn't traded since and was eventually removed from the ASX in 2024.
The situation escalated last December when The West Australian revealed that Australian Federal Police had raided AVZ Minerals' West Perth office, signalling the seriousness of the investigations into the company's conduct.
The legal action represents a significant development in a saga that has watched a once-promising lithium explorer collapse amid controversy and regulatory scrutiny, highlighting the critical importance of transparent corporate governance for Australian companies operating in challenging international jurisdictions.
