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16 Aug 2008


In March 2006 Stephen Lay was appointed CEO of Altona Resources Plc, listed on London’s Alternative Investment Market.

Altona Resources, through its Australian subsidiaries holds the licences for major coal deposits in the Arckaringa Basin in South Australia. The deposits are likely to warrant a significant investment to develop a mine feeding a major coal-to-liquids petroleum plant at site with the cogeneration of power.

In July 2006 Mr Lay resigned “for personal reasons”. These reasons are outlined below.

Mr Lay resigned from Altona Resources because the Australian Immigration authorities refused him entry into Australia and informed him there was an Interpol Red Notice against him. The Red Notice was requested by the Georgian authorities in 2003 to answer charges made against him of “massive tax evasion”. Mr Lay was being held vicariously responsible for alleged non-payment of corporate taxes of a Georgian entity that he had responsibility for between 1998 and 2000.

These charges were falsified and were brought as part of a concerted campaign to destabilise the investment of an Australian company in Georgia.

Under the stewardship of Mr Lay the Georgian entity, Quartzite LLC, was built to become an 80,000oz a year gold producer in the Bolnisi Region. The operations became the country’s largest exporter and recognised as one of the most successful private foreign investment companies. Whilst Director of Finance and Operations of the Georgian company, Mr Lay refused to meet increasingly unreasonable demands of some local “businessmen”. Due to the increased hostility of these demands Mr Lay left Georgia in May 2000 due to concerns for his safety.

These local businessmen took over management control until the Australian company were able to broker a peace with diplomatic intervention. In late 2002 hostilities resumed and the falsified charges brought against Mr Lay were filed in an attempt to discredit the foreign investor.

The motives of the local businessmen was never in doubt; had they been honourable then the alleged unpaid taxes would have been paid whilst they had management control.

Ironically the Australian Department of Foreign Affairs and Trade played an important role in supporting Mr Lay and the Australian company in 2000, and again in supporting the Australian company in late 2002 when they were able to assist in diffusing the situation.

Despite a number of very high level testimonies supporting Mr Lay’s good character and confirming the situation in Georgia, the Australian immigration authorities still refused to allow Mr Lay entry until the charges and Red Notice were lifted.

This could have taken many months and hence Mr Lay’s position with Altona was now untenable, leading to his resignation.

After several months of legal and diplomatic pressure in Georgia the charges were eventually dropped and the Red Notice removed. Too late!

The perpetrators of the false charges against Mr Lay are themselves wanted by the Georgian authorities and Interpol, including ex-Governor of the Bolnisi Region Levan Mamaladze