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by Mike Caswell
Katanga Mining Ltd. has agreed to pay $30-million to settle allegations from the Ontario Securities Commission. The OSC cited the company for substantially overstating its copper production and for disclosure failures related to payments to entities in the Democratic Republic of the Congo. The settlement includes an order removing the company's chief executive officer, Johnny Blizzard.
The deal with the OSC comes after years of errors in Katanga's financial reporting. The misleading figures include the understatement of the company's cost of sales by $88-million (U.S.). The company also overstated its fixed assets by $117-million (U.S.) in several reporting periods.
The settlement was accepted at a hearing on Tuesday before a three-member OSC panel. The deal includes sanctions for several of Katanga's officers. Among them is Aristotelis Mistakidis, a director and senior executive at Katanga's majority shareholder, London Stock Exchange listing Glencore PLC. He must pay $2.45-million and serve a four-year officer and director ban. (The fine is no great burden for him -- according to Forbes his net worth is $1.9-billion (U.S.).) Also banned is Katanga's CEO, Mr. Blizzard, who must serve a two-year suspension and pay $400,000.
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