Blue Gold Limited is once again facing serious legal action, as investors have been forced to seek emergency intervention from the Grand Court of the Cayman Islands to prevent what they allege was a deliberate attempt to strip them of their lawful shareholder rights.
In a decisive ruling, the Cayman Islands Grand Court granted an injunction restraining Blue Gold from proceeding with an Extraordinary General Meeting (EGM) intended to pass a resolution that would restrict investor shares from trading.
The Court found that there were serious legal questions as to whether Blue Gold’s actions violated shareholder protections and fiduciary obligations.
This legal intervention comes amid mounting evidence of a broader pattern of investor misinformation, corporate restructuring, and disputed representations surrounding the Bogoso-Prestea gold mine in Ghana.
Attempt to Strip Investors of Their Shareholder Rights
Institutional investors, including RCF VII Sponsor LLC and S&R Capital, initiated urgent legal proceedings after Blue Gold’s board sought to pass a resolution that would classify their shares as restricted from trading.
Investors argued the proposed resolution would:
• Override shareholder rights protected under the company’s governing documents
• Breach directors’ fiduciary duties
• Contravene contractual assurances that their shares would remain freely tradable
• Attempt to pre-determine issues already before the Court
The Cayman Islands court agreed there were serious issues to be tried and granted an injunction to prevent irreversible harm to investors.
SEC Filings Reveal Investors Were Raising Funds for an Entity That Did Not Own the Mine,/b>
Further scrutiny of Blue Gold’s public disclosures raises even more serious concerns.
Blue Gold’s SEC filings show that capital was raised for an entity called Blue Gold Bogoso Prestea Limited, with representations that funds were being deployed in connection with the Bogoso-Prestea mine.
However, according to official Ghanaian mining records and lease ownership structures, Blue Gold Bogoso Prestea Limited never held the mining lease, nor did it own the Bogoso-Prestea mine itself.
The mining lease was held by a different legal entity entirely, meaning the entity presented to investors as the operating or asset-holding vehicle did not legally control the mine.
This discrepancy creates a fundamental disconnect between:
• The entity presented to investors as the mine-related investment vehicle
• And the actual legal entity that held ownership and operational rights to the mining asset
For investors, ownership of the lease is the core underlying asset value. Raising capital for an entity that did not legally hold that asset raises serious questions regarding disclosure accuracy, investor representations, and the legal basis on which funds were solicited.
Pattern of Financial Collapse and Investor Losses
These disclosure concerns follow the well-documented collapse of the Bogoso-Prestea mine under Blue Gold’s predecessor ownership structure.
Investigations revealed that after acquiring the mine, operators left behind unpaid workers, unpaid suppliers, and substantial outstanding debt. Creditors were exposed to major losses, and the Ghanaian government ultimately revoked the mining lease due to operational and financial failures.
Despite these failures, Blue Gold restructured and sought to raise additional capital through new corporate vehicles and public listings.
The latest Cayman Islands injunction now demonstrates that even institutional investors have been forced to turn to the courts to prevent further actions that could impair their ownership rights.
Court Intervention Signals Serious Governance Concerns
The Cayman Islands Grand Court concluded that allowing Blue Gold to proceed with restricting investor shares could cause damage that would be difficult to quantify, and that preserving the status quo was necessary to protect shareholder rights.
In a highly unusual step, the Court excused one of the plaintiffs from providing a cross-undertaking in damages, reflecting the strength and urgency of the investors’ claims.
Investors Now Seeking Judicial Protection
The fact that institutional investors have sought and obtained emergency court intervention underscores the seriousness of the dispute and the potential consequences of Blue Gold’s actions.
The combination of:
• Capital raises tied to entities without legal ownership of the mine
• Prior financial collapse and creditor losses
• Corporate restructuring amid unresolved liabilities
• And attempted restriction of shareholder rights
collectively raises profound questions about corporate governance, disclosure practices, and investor protection.
The Cayman Islands proceedings will now determine whether Blue Gold’s actions violated shareholder agreements, corporate law, and fiduciary obligations.
The outcome could have far-reaching implications not only for Blue Gold and its investors, but for investor confidence in mining ventures structured through offshore vehicles and public listings.
Source:
www.ghanaweb.com