SGX RegCo reprimands BlackGold Natural Resources directors, CFO over rule breaches

The Singapore Exchange Regulation (SGX RegCo) has issued public reprimands against four senior officers of BlackGold Natural Resources Limited for breaching Catalist Rules.

Executive Director and Chief Executive Officer Andreas Rinaldi, Independent Directors Lim Chee San and Bangun Madong Parulian Samosir, and Chief Financial Officer Suherman Budiono were found to have failed in their duties to ensure proper internal controls and timely disclosure of material information.

SGX RegCo stated that the Board breached Catalist Rule 719(1) by failing to maintain adequate and effective systems of internal controls and risk management. In addition, they breached Catalist Rule 703(1)(a) by failing to promptly disclose material events that could affect BlackGold’s share price and market integrity.

The reprimand stems from the Board’s failure to announce the termination of a key cooperation agreement between PT Samantaka Batubara (PT SB), BlackGold’s principal subsidiary, and its sole cooperation partner PT Global Energi Lestari (PT GEL). The termination, which occurred around 23 February 2023, significantly impacted PT SB’s ability to continue coal production and deliveries to its customers.

SGX RegCo reprimanded Rinaldi individually for failing to disclose the expiry of the Group’s sole coal mining concession in Indonesia on 25 February 2023. Both events constituted material information that should have been disclosed promptly to prevent the creation of a false market in BlackGold’s securities.

Budiono was similarly reprimanded for his role in the delayed disclosure of the termination of the cooperation agreement with PT GEL. Despite learning of the termination in January 2023, the CFO failed to escalate the matter, resulting in a delay that SGX RegCo deemed unacceptable.

PT SB held exclusive mining rights to BlackGold’s only coal mine concession in Indonesia, which expired on 25 February 2023. At the time, PT SB was the Group’s sole revenue generator.

The cooperation agreement with PT GEL, which was responsible for PT SB’s coal production and delivery activities, was terminated on 30 November 2022 due to PT GEL’s non-fulfilment of obligations. However, the notice of termination was issued without the knowledge or approval of the Board.

As a result of the termination, PT SB was unable to continue coal production and delivery operations. Despite early indications of operational disruptions by December 2022, the Board was only formally notified of the termination on 23 February 2023, after the matter was escalated by the Head of Compliance to the Company’s Sponsor and subsequently to the Board.

Although the Board resolved to make an immediate disclosure, the Head of Compliance was hospitalized on 24 February 2023, delaying the announcement until 1 March 2023.

The announcement warned that coal production and delivery would be dependent on a new cooperation agreement and that the termination would materially impact BlackGold’s financial performance for the financial year ended 31 December 2022.

Separately, the Board (excluding the CEO) only became aware of the expiry of PT SB’s mining licence on 8 March 2023. The Company subsequently disclosed the licence expiry on 9 March 2023, stating that PT SB had halted all mining operations pending the renewal of its licence.

As of today, PT SB has not secured a new cooperation partner or obtained a renewal of its mining licence. Consequently, the subsidiary’s operations remain suspended.

Trading of BlackGold’s securities has been suspended since 15 June 2023. The Company was placed under judicial management on 26 January 2024.