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LISTED investment vehicle Asset Backed Holdings is set to become a mining and industrial house doing business with China following a major change of its board, including the addition of mining player Mark Caruso.
Gone are directors Michael Perrottt, Peter Huston and Ludger Kohmascher and company secretary Niels Kroyer, who have all resigned.
In their place are Mark Caruso and Susmit Shah, who join remaining Asset Backed director David Argyle.
Also gone is Asset Backed’s investment in property management company Aliquot Asset Management, leaving the company with its 32.6 per cent share of unlisted public company Phosphate Resources Limited as its main asset.
The Christmas Island phosphate miner is expected to play a major role in Mr Caruso’s plan to turn Asset Backed into a major mining player, providing he can gain shareholder backing for his plans.
It is understood Mr Caruso is keen to try and gain control of the phosphate dust miner, which has a strong customer base in the Asia Pacific region.
However, Mr Caruso said he was aware of the sensitivity regarding PRL’s ownership.
PRL was formed in the early 1990s by the Union of Christmas Island Workers to reopen the island’s phosphate mines, which had been closed by the Federal Government.
The island’s workers still have a strong shareholding in the company and the union has been hostile towards any takeover attempts.
Indeed, the union helped to thwart Asset Backed’s takeover attempt last year.
With Mr Perrott, Mr Argyle and then Asset Backed director Antony Rigoll on the miner’s board, PRL conducted a $4.2 million share buyback.
Asset Backed did not take part and its stake in the miner rose from just under 20 per cent to 26 per cent.
PRL’s board then held a $4.2 million rights issue. Asset Backed was underwriting $2.7 million of that issue.
If the issue had proceeded and been under subscribed, Asset Backed’s stake could have risen to nearly 40 per cent.
However the union, along with the Australian Shareholders Association, approached the takeovers panel and by February the share play had been halted.
Mr Caruso said Asset Backed’s board had decided to sell the company’s stake in Aliquot Asset Management.
“It is not a core part of this business,” he said.
Aliquot Asset Management was once Aerodata, a company Mr Caruso was a director of.
The future of Phosphate Resources remains undecided, with Mr Caruso suggesting Asset Backed would be considering all of the options facing the company.
He admitted that the plan to link it with Mr Argyle’s China-based Norwest Chemicals was one option under consideration.
Mr Caruso said he was interested in the possibility of doing business with China.
Norwest is another phosphate player and has supply contracts with major domestic chemicals companies such as Lever and Kitchen.
Mr Argyle, who has been linked with PRL since its formation in the early 1990s, has been keen to join PRL and Norwest for some time.
He told WA Business News earlier this year that the two companies could form the heart of an Asian chemicals powerhouse.
With both Mr Huston and Mr Perrott off the board, many Asset Backed shareholders will also be pleased to see the removal of the Troika group of companies.
The Troika group of companies counts both Mr Huston and Mr Perrott as directors and includes Troika Securities, Troika Legal and Troika Management.
According to Asset Backed’s annual report, Troika Securities was its largest shareholder with a 17.74 per cent stake.
At Asset Backed’s annual general meeting in May several shareholders voiced their disapproval at the high fees the company was paying the Troika companies.
Mr Huston said Troika’s involvement with Asset Backed would cease.
Besides directors fees, both Mr Perrott and Mr Huston were also receiving consultancy fees through the Troika companies.
Mr Huston said he would remain involved with Aliquot Asset Management and that he and Mr Perrott would continue to do business together.
“Troika still has a management agreement with Aliquot,” he said.
Mr Huston said it was his “desire to see the company [Asset Backed] go forward under new direction”.
He said the Supreme Court action Asset Backed had launched against Equitlink eLink director Paul Crowther, who also has a major stake in Aliquot, was still on foot but in the process of being settled.