Finncobalt owner convicted of fraud in Spain as Sweden probes insider trading

The owner of Finncobalt, which is planning a battery minerals mine in Outokumpu, has been convicted of fraud in Spain and is suspected of serious insider trading offences in Sweden, Yle reports.

Roberto García Martínez, chief executive of the Swedish mining company Eurobattery Minerals, received a two-year prison sentence in Spain in January. The company is Finncobalt’s parent company, and Martínez owns Finncobalt and holds its highest decision-making power.

The conviction is linked to a 2011 fundraising effort for a gold and diamond mine in Sierra Leone. According to Spain’s Supreme Court, Martínez and a business partner collected money from investors but misappropriated most of the funds.

Martínez was also ordered to pay about three million euros in compensation. He will serve the sentence as a suspended prison term for five years, on the condition that he pays compensation each month.

In Sweden, the agency investigating financial crimes suspects Martínez of three serious cases of misuse of insider information. The allegations concern trading in the company’s own shares and financial instruments.

Martínez did not respond to Yle’s request for an interview.

Finncobalt depends on parent company funding

Eurobattery Minerals issued a stock exchange release about Martínez’s conviction months after the sentence was handed down. On Monday, the company’s chairman, Jan Olof Arnbom, announced that he was resigning with immediate effect.

Mangold Fondkommission, which acted as the company’s adviser and market monitor, then terminated its agreement with Eurobattery Minerals. This complicates the company’s operations because it is listed on the Nordic Growth Market, where trading initially requires a mentor.

Investor confidence in the company has been weak, and almost 98 percent of its value has disappeared over the past five years. Trading in the company’s shares has been suspended for a week.

Finncobalt’s chief executive, Ilari Kinnunen, said the situation currently has no direct effect on the Hautalampi mining project. He did not comment on the ongoing legal and regulatory processes.

“Finncobalt has a good Hautalampi project and promising copper prospects for further exploration, and we are determined to take them forward,” Kinnunen said in an email to Yle.

Finncobalt’s latest financial statements show that the Finnish subsidiary depends on funding from its parent company because its operations in Outokumpu are still at an early stage.

The company also has responsibility for dealing with waste from Outokumpu’s old copper mine. It has pledged to manage the old pollution and improve the condition of the environment.