Bre-X president alleges fraud
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Your support makes all the difference.In a new twist to the Bre-X Minerals gold mining scandal, the company's president, David Walsh, yesterday filed a fraud complaint with the Royal Canadian Mounted Police (RCMP), a spokeswoman for the police said. The move follows the delisting from the Toronto exchange of the shares, which lost nearly all their value after trading was restarted earlier this week.
Following a report by auditor Strathcona Mineral Services branding Bre- X's claim to the world's biggest gold mine a scam, Mr Walsh handed a letter alleging a fraud to members of the RCMP's commercial crime unit. No suspects were identified in the letter. Bre-X company officials could not immediately be reached for comment.
The filing of the complaint is the latest development in what has been described as "the world's biggest mining scam", involving the fabrication of test data at a secret Borneo laboratory, the unexplained death of a Bre-X geologist after a fall from a helicopter and evidence that senior directors made fortunes from share sales last year at the height of the shares' popularity.
Bre-X shares lost 80 per cent of their value in a 30-minute period in March after one of the company's partners, Freeport-McMoran, said its own tests had found "insignificant" quantities of gold at the Busang mine in the jungles of Indonesian Borneo.
Records of the Ontario Securities Commission showed that Mr Walsh sold 300,000 shares at an average price of around C$25 between April and September 1996, netting about C$7.5m (pounds 3.3m). In all, directors and their families cashed in shares worth more than C$100m.
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