Northern Minerals Ltd (ASX:NTU) received a first strike against its remuneration report as shareholders rejected motions to appoint four new Chinese-backed directors.
During its delayed annual meeting in Perth, the company emphasised its commitment to good governance following Treasurer Jim Chalmers' directive for Chinese-linked investment funds to reduce their holdings.
Chalmers ordered Yuxiao and its associates including individual investors Ximei Liu and Xi Wang along with British Virgin Island-registered Black Stone Resources and United Arab Emirates-based Indian Ocean International Shipping and Service Company to sell 613.5 million shares, about 10.4% of Northern Minerals.
Shareholders voted 37.5% against the remuneration report, and a similar result next year could lead to a spill motion.
Chinese businessman Wu Tao, a Yuxiao Fund controller, narrowly missed a board seat, with his vote receiving 49.06% support, while three other China-linked candidates were rejected by 70-91% of shareholders.
Tao also sought to replace former CEO Nick Curtis, but this vote was not held due to a recent board reshuffle.
Chair Adam Handley said that last year's complaints of suspicious trading to the FIRB were crucial, as the company did not fully understand the acquisitions. The board is now satisfied with the FIRB process's conclusion.
“Monday’s divestiture order by the Federal Treasurer was the outcome. Northern Minerals was not – nor should it have been – involved in determining – nor consulted on – the outcome,” he said.
“Our duty was to raise these reasonable questions we were unable to answer ourselves with the relevant authority. From our perspective, the board is satisfied that the FIRB process is now complete.
Growing unrest
Northern Minerals has experienced unrest among shareholders due to frustration over the development pace of Browns Range and differences of opinion. This has led to the nomination of new board members by several shareholders. The board is considering additional skills and characteristics to drive positive outcomes.
Handley, addressing the unrest, emphasised the board’s commitment to listening to shareholders and focusing on Browns Range.
Control of Northern Minerals has been contentious, with Chinese-backed shareholders unhappy about a deal with Iluka Resources Ltd (ASX:ILU) for rare earth minerals from Browns Range.
On Tuesday, Northern Minerals reported a data theft from its systems in late March, involving corporate, operational, financial, and some shareholder information.
The company has offered support to affected individuals and strengthened system protections. The hackers demanded a ransom, which the company refused to pay.
“As is typical with cyber security attacks on corporations like Northern Minerals, the hackers demanded a ransom from us. Northern Minerals — out of principle — refused to engage with the hackers on a ransom,” he said.
“The fact we disclosed the cyber security breach a day after the Treasurer’s divestiture order was announced is a coincidence.”
The breach is under investigation by Australian authorities, with unclear hacker motivations.
Northern Minerals holds significant heavy rare earth deposits, particularly dysprosium, valuable for wind turbines, electric vehicles and nuclear reactors.