The company said it disclosed the matter to the AFP on July 30 and that it continued to cooperate with the AFP's investigation.

Solomon Islands payments under investigation

Source: Sydney Morning Herald

Payments made by miners Allied Gold and St Barbara to a Solomon Islands' government official are being investigated by the Australian Federal Police.

Allied Gold, which was acquired by Perth-based St Barbara in 2012,­ ­allegedly provided benefits to the ­Solomon Islands' outgoing opposition leader Matthew Wale from 2011.

St Barbara then continued to pay the benefits until earlier this year, ­according to a report in the Solomon Star newspaper on Friday.

St Barbara said in a statement to the Australian Securities Exchange late on Friday that through its internal ­mechanisms it became aware of the payments and had reported the issue to authorities including the AFP, the UK Serious Fraud Office and the Solomon Islands Attorney General.

The company said it disclosed the matter to the AFP on July 30 and that it continued to cooperate with the AFP's investigation. St Barbara declined to comment further on the issue at this time. Documents compiled by St Barbara's legal counsel and reportedly obtained by the Solomon Star allegedly reveal that numerous executives from both Allied and St Barbara maintained relationships with Mr Wale that were of mutual benefit.

The companies allegedly paid for Mr Wale's children to attend the Anglican Church Grammar School in Brisbane, with annual fees reportedly as much as $113,000.

They also allegedly arranged employment for a relative of Mr Wale's and other smaller benefits, including a $13,500 payment to Mr Wale for "office set up expenses".

Allied Gold was reported to have ­initially benefited from the arrangement, allegedly gaining a letter ­confirming the legality of blasting at its Gold Ridge mine, now owned by St ­Barbara, the issuance of a special prospecting license for a tenement, and the removal of certain travel restrictions.

St Barbara did not confirm or deny any of these allegations in its statement to the ASX, including the involvement of its former managing director and chief executive officer Tim Lehany and then secretary Ross Kennedy.

It did however correct the article's reference to the "dismissal" of Mr ­Lehany and Mr Kennedy on the grounds of the payments, stating that Mr Lehany left the company this August as part of an "agreed departure" and Mr Kennedy was made redundant in March.

At the time of the Allied Gold transaction, the newly combined group boasted a market capitalisation of roughly $1 billion but a series of ­operational difficulties has seen ­St Barbara's market cap fall to around $70 million. In the same period, its share price has fallen from $1.75 to 14.5¢.

St Barbara entered the gold ­industry in 2005 via the acquisition of several West Australian gold assets from the liquidators of Sons of Gwalia, before branching out into the Pacific with the $556 million acquisition of Allied Gold in 2012.

The Gold Ridge mine in the Solomon Islands and the Simberi mine in Papua New Guinea promised strong growth opportunities for the miner, but neither operation has performed near ­expectations.

Simberi remains beset with technical issues and mining at Gold Ridge has been suspended since April due to serious flooding and illegal mining.

St Barbara said it does not expect to resume production at Gold Ridge this year and has begun talks to potentially transfer ownership of the mine to the Solomon Islands ­government.

In August, St Barbara reported a $501 million full-year loss for the 2014 financial year, including a $411 million hit for the non-cash impairment of its Pacific operations.