An Australian-listed mining firm has filed a criminal complaint before the Department of Justice (DOJ) against its former executive chairman, accusing the lawyer of helping design a nominee arrangement intended to keep foreign investors in control of a Philippine mining company.

The complaint-affidavit, filed on 31 July, names Atty. Julito "Sarge" R. Sarmiento and alleges a violation of Section 2-A of Commonwealth Act No. 108, or the Anti-Dummy Law, which penalizes individuals who knowingly aid, assist, or abet the planning of prohibited arrangements.

The offense carries a penalty of five to 15 years' imprisonment.

The complaint centers on a 17 January email allegedly sent from Sarmiento's account at Sarmiento Loriega Law Office (SL Law), where he serves as founding and co-managing partner, to executives of India's Kiri Industries Ltd. and a director of Makilala Mining Company Inc. (MMCI).

According to the complaint, the email outlined a plan to establish a Philippine holding company that would create special-purpose vehicles for various industries, with mining listed as the first priority.

The email allegedly stated that where a company was required to be 60 percent Filipino-owned, the majority stake "will be held by trusted Filipinos (e.g., our SL Law partners)," who would execute deeds of trust and undated deeds of assignment to ensure that the foreign client retained full control of the entity.

Celsius Resources Ltd. described the proposal as a deliberate attempt to circumvent the Anti-Dummy Law.

The complaint also cited Supreme Court rulings stating that the constitutional requirement for 60-percent Filipino ownership must include actual beneficial ownership and voting rights, not merely legal title.

The holding company was registered with the Securities and Exchange Commission (SEC) on 5 June.

Corporate records cited in the complaint show that the company is 99.9998 percent owned by a Singaporean entity, with Sarmiento listed among its three incorporators and directors.

Celsius holds a 40-percent interest in MMCI, which is developing the MCB copper-gold project in Kalinga.

The company said its investment was placed at risk following an 20 April stockholders' meeting, during which all five board seats were declared vacant and Sarmiento was reinstalled as chairman and president as the nominee of the majority shareholder.

According to Celsius, the remaining board positions were subsequently filled by lawyers from SL Law.

The company further alleged that law firm personnel have since been appointed to MMCI's management, corporate records have been transferred from the company's principal office to SL Law's offices, and Celsius' access to those records has been restricted. It said the matter has been raised with the SEC.

Meanwhile, a Kiri Industries subsidiary that assumed MMCI's loan from Maharlika Investment Corp. has declared the loan in default and initiated foreclosure proceedings on Celsius' entire 40-percent stake, with a public auction scheduled for 10 August.

Separate Anti-Dummy Law complaints have also been filed against Celsius directors by parties aligned with the majority shareholder.

Celsius said its directors are preparing and submitting their counter-affidavits.

Sarmiento has yet to publicly respond to the complaint, while the DOJ has not yet determined whether probable cause exists.