It is a salutary tale of sovereign risk. At stake is Tujuh Bukit, the jumbo gold and copper project on the island of Java, one of the biggest deposits in the world.
The warring players are mining entrepreneur Paul Willis, Intrepid Mines boss Brad Gordon and legal counsel Vanessa Chidrawi, and their Indonesian joint-venture partners, a couple now well known as simply Maya and Reza.
Mr Willis had long claimed he was forced to sign away his stake in the venture under duress by a room full of armed Indonesian thugs. Intrepid, formerly called Emperor Gold, had long denied it. The matter is before a court in Jakarta.
And now, in this most extraordinary story of corporate intrigue, an email has surfaced from Intrepid’s legal counsel Ms Chidrawi to chief executive Gordon and Maya Ambarsari and Reza Nazaruddin in 2008 supporting Mr Willis’ dramatic allegation that Intrepid conspired with Maya and Reza to force him out of the project.
In the email of April 21, 2008, which can be viewed online, Ms Chidrawi discusses co-opting the Indonesian police in the plan to get Mr Willis to sign a ”termination agreement”. If Mr Willis is not willing to sign, she writes, Maya and Reza will ”pursue all courses of action open to them – civil, criminal and administrative in Indonesia”.
Where the Intrepid and Willis stories mostly diverge is on two counts: Whether there was duress and whether Mr Willis had wrongly gone behind Intrepid’s back to do a deal with another potential miner, Bumi.
Mr Willis says he was forced to sign the termination agreement due to a threat at the hotel room that day by Indonesian heavies with guns.
Further, he says the alliance agreement between himself, Intrepid and Maya and Reza had elapsed on March 31, so Intrepid had no rights to the project when they conspired to force him to sign the releases three weeks later.
Intrepid, however, says Mr Willis was in breach of his fiduciary duties by trying to cut it out of the project and bring in Bumi.
As to the armed thugs, Intrepid concedes there may have been bodyguards present when Mr Willis signed his releases and walked away for $2.5 million but denies there was duress. In any case, the bodyguards belonged to Maya and Reza and were not Intrepid’s idea.
The supreme irony in this feud over the 23-million-ounce gold deposit is that last year, some four years after squeezing Mr Willis out of the picture, Maya and Reza then squeezed out Intrepid itself.
Intrepid shares tanked last year on the shock news that the company had been locked out of the Tujuh Bukit project. Things got even worse. Maya and Reza, the controllers of the PT IMN joint venture, later transferred the ownership of Intrepid’s 80 per cent stake to another vehicle, PT Bumi Sukses Indo (BSI).
The shareholders of BSI include some of Indonesia’s richest men, Edwin Soeryadjaya and Garibaldi Thohir, along with a Singapore hedge fund Provident Capital Partners.
Intrepid told the ASX in December that it remained legally entitled to 80 per cent of the project. ”Intrepid further asserts that it is the victim of an attempt at criminal fraud that is now under investigation by Indonesian police.”
Mr Willis brought a case in the Jakarta courts last month claiming $250 million in compensation for being forced out of the joint venture.
Intrepid did not turn up to court, instead writing to shareholders to say the action was baseless. In May, however, when the next hearing is scheduled, Intrepid said it would be present.
Mr Willis says that if he can prove duress – and the email helps his case – then he is able to both claim for damages and claim that the agreements that Intrepid signed with the Indonesians the following day can be declared null and void in Indonesia.
”The basis to declare as null and void is the term ‘an unlawful act’ and the discretion of the court to deal with direct products of unlawful acts, that is agreements signed so soon after the alleged duress/intimidation,” he said last week.
For its part, Intrepid has taken action in a court of arbitration in Singapore to establish its rights over the project. Any finding here is not enforceable in Indonesia but it may force the new owners of Tujuh Bukit to the negotiating table.
Intrepid has yet to respond.