CMKX...to prove the naysayers wrong.
Take into account this was one year after the run, around the time of the CMKX trial, when everybody thought they were dead and gone. Apparently still drilling in Sask and mining gold in Ecuador. HA!! I put the interesting part in bold if you don't want to read the whole thing but if you do, you will see interference by the SEC as well.
excerpted from Stocklein law group: a letter to
the Beckstead Law Firm, July 28, 2005
...Due to the Board's concerns and your apparent unwillingness to perform services for which you were retained or meet with your client, the Board determined it to be in the best interest of CMKM to terminate your engagement as its independent certifying accountant. Your firm's desire to engage outside counsel due to your inability to fully comprehend the depth of the requirements necessary for drafting a 10A letter is outside the scope of your engagement and CMKM should not be made to suffer these costs. Therefore, we are hereby demanding you remit to our firm, on behalf of CMKM, any unbilled portion of your retainer immediately.
....On or about June 22, 2005, almost one full month prior to your engagement, CMKM paid your firm a non-refundable due diligence fee of $25,000. CMKM understood your due diligence period to be for the sole purpose of allowing unfettered access to all currently available financial and corporate information pertaining to the activities of CMKM thereby allowing your firm a sound basis for either accepting or declining the audit engagement.
....Following the payment of the non-refundable $25,000 fee, CMKM and its associated professionals cooperated with you fully. You were encouraged to engage a geologist of your choice to travel with you to Canada to witness CMKM's ongoing drilling program and meet with CMKM's professionals handling the Canadian operations. In addition, several offers were made to you to take a trip to Ecuador, again with any professionals you deemed necessary, to observe a gold pour at the Yellow River facility where ore from the American Shaft was being processed. Further, during your due diligence period you were made completely aware of the current lack of complete books and records and the ongoing processes CMKM was undertaking to compile the required information necessary for you to design your audit procedures as well as address all areas of concern. You assured CMKM of your willingness to work through the process and allow management adequate time for gathering significant information outside of its current control.
....As part of your due diligence procedures, you issued “CMKM Mining, Inc.” a thirteen item list detailing information you deemed crucial to your decision of whether or not to establish an auditor-client relationship. Over the ensuing few weeks, you were provided full access to all of CMKM's currently available corporate and financial records in an attempt to satisfy the requirements on your list. Further, management and CMKM's other professionals worked with you to comply with your requests for items on the list. However, despite everyone's best efforts less than 25% of the items on the list were ever satisfied.
...In addition, during your due diligence period you discussed with our office the contents of a call you had with an employee of a regulatory agency, wherein you were told by her it was not in your best interest to engage CMKM as an audit client.
....Despite CMKM's inability to provide you with all of the requested items, on July 11, 2005, your firm chose to engage CMKM as an audit client and demanded a retainer of $100,000, of which $75,000 was paid, towards an estimated total audit fee of $350,000. The Board engaged your firm in good faith and fairly presented to you the current status of CMKM's books, records and other documentation prior to your engagement, as was confirmed to you during your due
....diligence period. Nonetheless, after accepting $100,000 and almost a month of due diligence, in just seven business days your firm recklessly rushed to conclusions not previously drawn during your due diligence period regardless of the fact no new information surfaced pertaining to CMKM. Further, all documents available at the time of your termination were also available during your due diligence period.
....You have informed us of subsequent calls you had with the government employee following your engagement as CMKM's auditor, after which you informed us of her request to assist in locating individuals that may have been previously associated with CMKM. In a follow-up conversation with our office, you informed us that assisting the government with an investigation “may impair your independence.”
....Subsequent to these additional calls with the government employee, your demeanor towards CMKM totally changed, as evidenced by your blatant refusal to meet with your client following issuance of your draft letter. It's not apparent the extent of the conversations you had with this government employee, but from your subsequent actions it appears you no longer desired to be CMKM's independent auditor. However, under the terms of your engagement, it is CMKM's opinion you had to create cause in order to terminate the engagement and keep all funds remaining under your retainer." |
