THE inspector investigating the involvement of Bula Resources plc in a Russian oil deal is travelling to Moscow this weekend and is scheduled to hold a crucial meeting there on Monday.
Barrister Mr Lyndon McCann has arranged to meet with the former Bula chairman, Mr Jim Stanley. Mr Stanley is at the heart of a number of mysteries which the Stock Exchange and the Government want explained.
The former chairman has not discussed the controversial deal with the company since September and has not responded to communications from Bula seeking answers to crucial questions. For some time Mr Stanley's whereabouts were unknown but he has recently been traced to an office in Moscow.
Faxed communications between Mr Stanley and the inspector have been described as "terse". Mr Stanley is using offices on Petrovka Street in central Moscow. The Irish Times has contacted the office on a number of occasions seeking comment from Mr Stanley, but without success.
High Court proceedings which Bula has issued against Mr Stanley were referred to during a hearing of the court in Dublin on Monday. Mr Michael Collins SC for Bula, told the court Mr Stanley was being sued by his former company on the grounds that he may have made "secret profits" from the deal he set up with a Russian company KMNGG.
Mr Collins said Bula had issued proceedings against Mr Stanley on the basis of "alleged secret profits, breach of fiduciary duty, issues of that sort".
Bula entered the deal set up by Mr Stanley in August 1995. He told the board that Russian company, KMNGG, and a British Virgin Islands company, Mir Space International, had shared rights to the Salymskoye oil field in Siberia. Bula could buy 25 per cent of the Mir Space interest in return for 101 million Bula shares. The shares would be transferred to the parent company of Mir Space, Mir Oil Development. The board approved the deal.
The 101 million shares represented about 6 per cent of the entire Bula share capital. Bula put millions of pounds of shareholders funds into drilling test wells in the oil field. In October 1996 a flow of 942 barrels per day was announced to the market. On March 5th last, the company announced that the market had been misled. The flow from the well had in fact been insignificant.
However, during November 1996 and January 1997, 28 million of the 101 million Bula shares transferred to Mir, were sold on the market. In the High Court on Monday, Mr Collins said there was "concern that Mir Oil could have been so well informed" about the true results from the well, and could have sold the 28 million shares while the price remained unaffected by the true results from Russia.
Mr Collins said that, rather than Mr Stanley "having come across" Mir Oil in Russia, it may be the case that Mr Stanley was in fact Mir Oil or that he had an interest in Mir Oil. "If Mr Stanley did indeed have an interest then that would explain how Mir Oil had information about the drilling results."
During his visit to Moscow Mr McCann will be hoping to meet Russian businessmen and a firm of solicitors involved in two deals negotiated in April and August 1995.
However, it is understood one Russian figure central to Mr McCann's investigation, Mr Vladimir Tokarev, has not yet agreed to a meeting. Mr Tokarev, a former general manager of KMNGG and now a senior figure in the holding company, KMOC, which owns KMNGG, is understood to believe that he has already told Bula all he knows about the affair.
It was Mr Tokarev and Mr Stanley who represented KMNGG and Bula Resources respectively, when the deal involving the oil field was being negotiated. It is not known who represented Mir Oil. Another senior Russian figure in KMOC, Mr Nikolai Bogatchev, has said it was Mr Tokarev and Mr Stanley who negotiated the deal and that Mr Tokarev at all times believed Mir Oil to be an offshore company belonging to Bula. Mir Oil and Mir Space are registered on the British Virgin Islands.
It is unclear how much progress Mr McCann can make in Moscow if Mr Tokarev declines to meet with him and if Mr Stanley who is being sued by Bula, is less than forthcoming.
KMNGG signed its deal with Mir Space in April 1995. Bula bought into the deal in August 1995. The Moscow firm of solicitors, Klishin and Partners, was involved in both the April and the August agreements. It acts or has acted for both Bula and Mir Oil/Mir Space. Mr McCann has asked Bula to direct the firm of solicitors to co-operate with him and to furnish him with all relevant documents. It is not known if this request has been complied with, although Bula has repeatedly stated it wishes to co-operate fully with Mr McCann's inquiry.
At the time the deal was agreed by Bula, Mr Stanley told his fellow directors that Mir Oil was owned by Mr Charles Ellis of South Africa. Mr Ellis has since denied this, both to the board and to Mr McCann.
In one of the more bizarre twists of this tale, Mr Craig Bond (39) son of the disgraced Australian tycoon, Mr Alan Bond, has come forward claiming he is the beneficial owner of Mir. However, he has not signed an affidavit to this effect.
Counsel for Mir Oil, Mr Martin Hayden, told the High Court on Monday that Mr Craig Bond was the beneficial owner of Mir and that the company will, within two weeks, furnish Bula with details of who owns Mir Oil and who has been the beneficial owner of the company since it entered into the agreement with Bula two years ago.
An order made by the Dublin court on September 12th last, "freezing" the remaining 74 million unsold Bula shares paid out as part of the deal, will not be lifted until this occurs, Mr Justice Kelly ruled on Monday.
Counsel for Bula, Mr Collins, outlining the details of Bula's Siberian adventure to Mr Justice Kelly said: "It's hard to know in all of this where the truth really lies."
Mr McCann will be hoping that his trip to Moscow will go some way towards helping him decide the truth behind the Salymskoye deal. He reports to the Tanaiste and Minister for Enterprise, Trade and Employment, Ms Harney, on January 23rd.
