[Kabar-indonesia] Bre-X trial ruling set for Feb. 2

[Joyo at aol.com]

The Toronto Star 
September 1, 2006

Bre-X trial ruling set for Feb. 2

Court hears final arguments in decade-old case

Geologist faces illegal insider trading charges

Madhavi Acharya-Tom Yew

The trial against John Felderhof, former chief
geologist for Bre-X Minerals Ltd., marked a
long-awaited milestone yesterday as lawyers completed
their closing arguments in the case.

It took prosecutors and defence lawyers almost two
weeks to recap complex legal arguments, detailed
testimony and thousands of documents that have been
entered into the court record during the trial, which
began on Oct. 16, 2000.

Ontario Court Justice Peter Hryn said he hopes to
deliver his ruling on Feb. 2, 2007.

The Ontario Securities Commission alleges that
Felderhof violated the Securities Act by allowing
false or misleading press releases to be issued.

The commission also alleges that Felderhof sold $84
million worth of Bre-X stock between April and
October, 1996, while having information that was not
disclosed to investors.

He faces penalties ranging from a fine of $1 million
to imprisonment for two years, plus additional
financial penalties of up to three times any profits
from insider trading.

Shares of Bre-X roared up the Toronto Stock Exchange
in the mid-1990s on reports that the company had
uncovered the world's biggest gold deposit on its
Busang property, in a remote part of Indonesia.

Bre-X collapsed in March, 1997, after subsequent
testing found that results had been salted, or spiked
with gold, and that there was little, if any, gold on
the property.

The court heard that Bre-X had trouble securing legal
ownership of Busang, had work permits cancelled, and
was beset by competing ownership claims, in some cases
by powerful and shadowy Indonesian businessmen.

The commission says those troubles constituted
material facts that should have been disclosed to the
public, and would have had a significant impact on the
price of Bre-X shares.

"We're not talking about a parking ticket. We're not
talking about some trivial dispute with the Indonesian
government," prosecutor Emily Cole said during her
closing argument, referring to work-permit troubles.

Busang was Bre-X's only property and Indonesian
government officials had the final say on whether the
company could explore and mine the site, she added.

The defence has argued that these events were the
subject of dispute.

The defence contends that Bre-X had legal title to
Busang at all times, that the rival ownership claims
were baseless, and that the company had been granted
other forms of authorization from the Indonesian
government.

The defence team also argues that there has been no
evidence that Felderhof knew sampling results from
Busang had been tampered with or salted.

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Joyo Indonesia News Service
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