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Global Lithium Resources (ASX:GL1) has pleaded with the Takeovers Panel to play umpire as the civil war inside the critical minerals explorer’s board rages on.
Things hit another fiery gear this week after two board members, chairman Ron Mitchell and non-executive director Matt Allen, declared they would “defy” any push by Dianmin Chen to take control of the company.
This escalation has come via a request from GL1: It wants to see the official Australian takeovers judge either freeze or even forcibly sell the third-share slice of the company controlled by “alleged associates” – that is, Mr Chen and his allies.
Mr Chen is backed by a bloc that wields as much as 30 to 40% voting power.
On the Takeovers Panel’s side of things, it has confirmed it had recently received the relevant submission from Global Lithium regarding foreign ownership guidelines.
The whole thing boils down to concerns around “covert Chinese influence” and how aggressively the bloc appears to want to reshape the explorer.
“If there is a change in the directors of Global Lithium at the AGM, there is a risk that the shareholders… will control the board… and change the direction of Global Lithium and make decisions that may prove difficult to unwind,” the miner’s management team shared in a price sensitive market update on Tuesday.
All eyes have been fixed on one crucial date: February 13, when the AGM is to be held.
The general meeting was originally supposed to be held in November but Global Lithium successfully lobbied the WA Supreme Court to partially delay the gathering – it was instead pushed back to its now-locked February scheduling.
When the AGM does run, Mr Mitchell and Mr Allen will vote against re-electing Dr Chen and will push to cap the number of company directors at just three.
They will also look to block the proposed appointment of Chinese businessman Liaoliang “Leon” Zhu to the board; his arrival through Sincerity Development in mid-2024 was one of the first tinder sparks that started the brawl some months ago.
From Mr Zhu’s side, he’s angling to have Global Lithium stay focused on lithium. The board has been looking into nickel and gold as a possible future venture.
“This shift is concerning,” the Sincerity owner said. “While lithium prices are currently down, we need to position the company to benefit when [the] lithium market recovers. Lithium remains a highly valuable resource for the energy transaction in the future, and it is puzzling that the board has deprioritised this focus.”
He also accused the board of running “a smear campaign” against him.
On the line in the February vote are controlling powers relating to Global Lithium’s Manna project in east Kalgoorlie and Marble Bar in the Pilbara region.
The company has argued that keeping Australian influence over these critical mineral projects aligns with the Albanese government’s ongoing ambition to only limit any major foreign investments to “like-minded” parties.
Alongside Sincerity, China’s Canmax Technologies and Chinese mining services magnate Yongfang carry share stakes in the WA explorer.
So too Chris Ellison’s Mineral Resources (10%) and Gina Rinehart (under 5%).
GL1 last sold at 18cps; the share price has barely moved this week.
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