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Quantum Graphite says the accounting firm was responsible for a 14-month trading halt on its securities.
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Mining company sues Grant Thornton for $58m
06 December 2022
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Mining firm Quantum Graphite has filed court proceedings against Grant Thornton for $58 million in damages following an audit report two years ago.
The ASX-listed company alleged Grant Thornton wrongfully gave a disclaimer opinion in its 2020 auditor’s report which led to Quantum securities being placed on hold from October 2020 to December 2021.
“The company announces today the filing of court proceedings in the Victorian Supreme Court against Grant Thornton Audit Pty Ltd (Grant Thornton) seeking damages in excess of $58 million suffered as the result of its failure to express an opinion in respect of the company’s 2020 financial statements,” said Quantum Graphite.
The mining firm alleged that Grant Thornton had breached its retainer, was negligent and engaged in misleading conduct in the 2020 audit.
Quantum Graphite claimed that Grant Thornton wrongfully said it did not have sufficient audit evidence to support Quantum’s calculation of how much graphite it could mine from its Uley Project.
Quantum Graphite alleged that Grant Thornton’s opinion relied on a lower price based on unspecified market analysis which the accounting firm sourced from another client.
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“GTA (Grant Thornton) failed to properly communicate to those charged with governance of QGL (Quantum Graphite) the circumstances which had let GTA to its expected disclaimer of the 2020 financial report, namely the Dunbar Analysis and GTA’s proposed reliance on it, with the result that QGL was denied the opportunity to address the material flaws in that analysis,” the lawsuit said.
Quantum Graphite believed that if Grant Thronton had not included the disclaimer opinion it would not have been subjected to a 14-month delay in accessing capital markets and obtaining capital to progress the Uley project.
The mining company’s shares were suspended from trading from the beginning of October 2020, the day after it released its 2020 financial report, to 14 December 2021 when Quantum Graphite released a half-yearly report.
Before the suspension the mining company’s shares were trading at $0.051 and they resumed at $0.15 once the halt was lifted.
Grant Thornton declined to comment. “As this is an open case we cannot currently provide any comment.”
Quantum Graphite is based at the Eyre Peninsula in South Australia where it owns the Mikkira Graphite Deposit. The company runs its Uley Graphite project at the deposit where flake graphite is mined from several sites.
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