When Loyalty Clashes with Duty: Legal Battle Brews at Nyrstar
- Kris Vansanten
- Sep 1, 2024
- 2 min read
Updated: Apr 22
It appears that, as part of the restructuring of Nyrstar, the listed residual company Nyrstar NV was transformed into a shell company with the (sole?) purpose of giving the restructuring a veneer of legitimacy and of protecting the restructuring itself and the reference shareholder Trafigura from possible legal action.
This is evidenced, among other things, by the loan agreement between Nyrstar and Trafigura (the so-called Limited Recourse Loan Facility or LRLF), which contains a number of highly questionable legal conditions, including a prohibition on Nyrstar and its directors taking legal action to challenge the restructuring or to attack Trafigura itself.
This now appears to be boomeranging on Nyrstar and its beleaguered board - and secondly on the lawyers and advisers who put this structure in place. It could also be a possible explanation for the board's behaviour, which is incomprehensible to many, and its refusal to file such claims - at least on a precautionary basis, which would clearly be in the company's interest and could be done without significant cost.
In light of the Nyrstar case, shouldn't there be a broader public debate about whether corporate governance laws, compliance monitoring and sanctions for violations should be strengthened? Do we, as a society, find it acceptable that an allegedly fraudulent restructuring can be shielded from prosecution, and that a board of directors can continue to shamelessly cooperate with the investigation of an alleged crime without decisive intervention by the authorities that are supposed to be working against it? Is this not an issue that should be included in the current coalition talks?
We find the way in which the actors in this drama seem to continue to wallow in deception, denial and obstruction absolutely hallucinatory, and we have serious questions about the lack of any meaningful action on the part of the media and official authorities.
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