Angry shareholders suggested the Fraud Squad be brought in to investigate how Bula Resources lost more than £15 million in Russia, and called on the board to apologise for the current state of its finances at the company's annual general meeting in Dublin yesterday. For more than two hours, directors faced a barrage of questions from the floor, focusing mainly on who was responsible for a false report from a Siberian oilfield, and on how directors did not know the true ownership of a Russian partner company.
Mr Jim Stanley, who managed Bula for a decade but resigned suddenly in April, did not attend the meeting. The acting chairman, Mr Tom Fitzpatrick, and the interim managing director, Mr Pat Mahony, said the company had had no contact from Mr Stanley.
In a statement read out to the a.g.m., Mr Fitzpatrick said the company was trying to recover some of the £9.1 million it lost on its venture at Aki-Otyr due to "legal difficulties".
The company had now made a claim against its former solicitors in London, Gouldens, seeking reparations, and would proceed with a court action if it did not receive satisfactory proposals by the end of this month, he added.
On the question of the Salymskoye oilfield in which Bula bought a 50 per cent stake, Mr Fitzpatrick made it clear that Mr Stanley - at that time both chairman and managing director - had proposed the acquisition from another company, Mir. Mr Stanley had confirmed orally and in writing that he had no connection or interest in Mir - apparently owned by a private individual, a South African named Mr Charles Ellis. "The rationale provided by Mr Stanley for the individual's involvement in the transaction and for his requirement for confidentiality was reasonable," Mr Fitzpatrick said.
Two weeks ago, he added, the board was notified that in fact Mr Ellis is not now, and has not been for some time, the beneficial owner of Mir.
It was Mr Stanley, he said, who had directed and approved the official announcement that the company's oil well number 705 at Salymskoye produced 942 barrels a day in a four-day test. This information turned out to be inaccurate; the well was not commercially viable at all.
Many shareholders rose to criticise the board for not keeping a closer eye on the way Mr Stanley was running Bula.
"It should be called the Fenians; it's a secret organisation," said Mr Louis McKevitt to rousing applause. "If I ran a small credit union on this basis, I would be run out of town." As far as he was concerned there had been "skulduggery", and he had lost a lot of money which he did not expect to recover.
"It is a waste of time coming here, year after year," commented a Ms McKeown. "We've had rainbow governments and tribunals, but this beats them all. This company should be handed over and investigated by the Fraud Squad."
"I came here expecting to hear the word `apology'," said Mr Jim O'Donnell. "Either an acknowledgment that you yourselves haven't performed, or that you have been duped, wouldn't go amiss. . .you should hang your heads in shame."
Mr O'Donnell said he would like to see a non-institutional investor on the board of the company, steps taken to prevent such debacles from recurring, and for the board to "share in the pain".
In response, Mr Fitzpatrick and Mr Mahony said they deeply regretted how things had worked out. The investigation into how the incorrect test figures were published was still pending, and the board would not shrink from taking whatever action was appropriate.
"All directors have acted in good faith and in the interests of the company, based on the information we had at the time. There is no question of impropriety by the board," said Mr Fitzpatrick.
Speaking after the meeting, Mr Mahony said that, as recently as May of this year, Bula had engaged in extensive talks with a large multinational company about the possibility of a merger, but this had not worked out.
"There's a lot of interest in our Libyan interests. We have a lot of options open to us, and we are not ruling out anything. The main consideration is the shareholders," Mr Mahony added.
