Like other successful financial investigations, barrister Mr Lyndon MacCann found the truth by following the money trail. By discovering payments to former chairman and chief executive, Mr Jim Stanley, he established that he was the owner of Mir Oil and Mir Space and benefited from the sale of 27 million shares in November 1996 and January 1997. The sale of the shares netted him £700,000.
Despite the suspicions which have been building up, the strength of the finding will be closely read by the 30,000 shareholders of Bula, which holds its annual general meeting in Dublin today. The long-suffering shareholders have seen Bula's share price fall from 3.5p to 1.5p over the last few years.
They have now been told that the man who ran the company effectively got Bula to pay £2.5 million in shares to a company he himself controlled, in return for a stake in a Russian oilfield which turns out not to be worth very much. And Tanaiste Ms Harney is highly critical of the corporate governance of Bula which, for example, never bothered as required by statute to keep a register of the interests of its directors.
Mr Stanley told Bula, in writing, back in the summer of 1995 that he had no connection with the two Mir companies. But Mr MacCann has found that both Stanley and his son Brendan were "involved in an executive capacity as officers of both companies".
The report reveals that Ms Sue Ann Neil, was the beneficial owner of Chamonix Corporate Secretaries, which held the funds which resulted from the sale of the 27 million shares.
Over a period stretching from the end of 1996 to the first months of 1997 Ms Neil on the instructions of Mr Stanley made several payments to him and his son Brendan as "officers" of both Mir companies.
Bula has had an unhappy time in Russia, where two ventures have cost it £20 million. Its Irish and Russian directors initially fell out over an investment involving Aki-Oytr, another Russian oil company.
The genesis of the separate Mir saga goes back to March 1995 when Stanley told his fellow directors about a deal involving a western Siberian company, KMNGG, which owned 50 per cent of the licence for an oil field in Salymskoye. Another company called Mir Space International Ltd owned the other 50 per cent. Mir Space was a 100 per cent subsidiary of Mir Oil Development Ltd and the licence was its only asset. Both Mir companies were registered in the British Virgin Islands.
The deal was that Bula would buy into Mir and thereby into the Salymskoye oil fields. In financial terms the deal meant Bula entering into an agreement with Mir Oil Development Ltd, transferring 101 million shares to the Virgin Islands company in return for a share of its involvement in the Sklymskoye oil field. At the time the 101 million shares were worth around £2.5 million. The company began a process to see who was the beneficial owner of Mir. The registered shareholder was a company called Chamonix Corporate Secretaries Ltd, with an address in another offshore location, Jersey. Chamonix was a company formations business - setting up companies on behalf of clients and providing nominee directors.
On October 13th Bula announced publicly that the testing programme on well 705 in Salymskoye had shown it would produce 942 barrels of oil per day.
After questions were raised, another report was issued informing the stock market that well 705 had not produced the results announced, or anything close to them. The test well drilling on site had in fact recorded "insignificant" quantities of oil.
In April at a meeting of Bula directors Mr Stanley submitted his resignation. The new chief executive of Bula, Mr Pat Mahony, travelled to Russia as part of the company's investigation into the October announcement and the Salymskoye deal. The High Court then froze almost 74 million of the shares transferred to Mir, pending clarification of who owns them. The other 27 million shares had already been sold.
