Bluescope Steel is urging Australia's Federal Court to throw out claims it misled a Hong Kong firm over the purchase of New Zealand's ironsands mining.Bluescope denies deceiving Cheung Kong Infrastructure Holdings, controlled by billionaire tycoon Li Ka
Bluescope Steel is urging Australia's Federal Court to throw out claims it misled a Hong Kong firm over the purchase of New Zealand's ironsands mining.
Bluescope denies deceiving Cheung Kong Infrastructure Holdings, controlled by billionaire tycoon Li Ka-shing, over the sale of iron sands operations here.
Ironsands are an iron ore substitute used by steel-makers in the smelting process, and in 2008, the Taharoa mine was estimated to annually export about 850,000 tonnes of ironsands, mainly to Japan and China.
Bluescope and its adviser Merrill Lynch are accused of trying to sell the mine while knowing its top customer -- a rival bidder -- would stop buying the product if it was sold to a third party.
Cheung Kong is seeking damages from Bluescope and the investment bank that could include the mine's $NZ250 million purchase price, according to court documents.
Bluescope has admitted Chinese state firm Chengde Iron and Steel had threatened to stop buying the iron sands, but said it took the statement as a negotiating tactic.
It also pointed to pre-sale documents warning Cheung Kong that it could not guarantee the information it was providing was correct or reliable.
"We deny the allegations and we're certainly defending ourselves against the allegations," a Bluescope spokesman said yesterday.
Cheung Kong agreed to buy the mine in August 2008 but the deal was blocked by New Zealand's foreign investment regulators. Chengde stopped buying the iron sands but blamed the global financial crisis for the move.
Cheung Kong is a publicly listed infrastructure company with a market capitalisation of about $HK67 billion ($NZ12.3 billion) at December 31, 2009, according to the company's website.
It operates in Hong Kong, China, Australia, New Zealand, the UK, Canada and the Philippines.
Cheung Kong has previously lodged a related claim against Merrill Lynch International (Australia) Ltd, alleging "misleading and deceptive conduct" while acting as an adviser to BlueScope.
"During the due diligence process for the sale of the mine Merrill Lynch's conduct created a false impression about the ongoing business and value of the mine," Cheung Kong said in a statement on March 25.
