Obituary: Bre-X kingpin dies in hospital
CALGARY (CP) -- David Walsh, the chunky, chain-smoking, beer-loving onetime stock promoter, was described by many as just the guy next door who struck it lucky.
But the enduring image of Walsh is of the ashen-faced figure darting in and out of the Calgary office of Bre-X Minerals Ltd. after the high-flying mining company's spectacular demise in May 1997.
Walsh, 52 -- viewed by bitter investors as either the biggest crook or biggest fool in mining history -- died Thursday. he had been unconscious and in critical condition since being stricken with a brain aneurysm at his estate in the Bahamas last weekend.
Walsh did apologize to investors in a news story in late 1997 but that did little to ease the hostility toward him -- especially since he had by then cashed in enough of his Bre-X holdings to ensure a life of ease.
"I am really quite sympathetic toward the investors' losses," he said. "This was definitely never the way things were supposed to turn out when we first went into Indonesia 4 1/2 years ago."
Jim Bentein first got to know Walsh when Bentein was a reporter for the Sun newspaper chain.
"He (Walsh) comes across to most people as a relatively sincere individual," said Bentein.
"If you met David in a bar you'd probably like him. He's like the guy next door who struck it big at one point."
Before Walsh's Bre-X breakthrough, his life resembled a roller-coaster ride that went from modest success to absolute bust. He had earned a decent living as a stockbroker before embarking on his stock-promoting career.
Walsh, the son of Montreal stockbroker, and his wife declared personal bankruptcy in 1993, owing almost $60,000 on 15 different credit cards. It wasn't long after that his luck changed and he began his incredible rise to fortune with his old geologist buddy, John Felderhof, in the Borneo jungle.
While Felderhof handled the mining side, Walsh raised money and later fought off takeover attempts by gold giants that included Placer Dome and Barrick Gold, which had enlisted the support of the Indonesian government.
He finally struck a deal with Freeport-McMoRan Copper and Gold. It was Freeport that first set off alarms when said it couldn't match the Bre-X drilling results with its own work on the site.
Walsh was at the helm when the company hit $6 billion in market value. Stockholders lost as much as $3 billion after it crashed.
Walsh and his wife Jeanette, who are the targets of a number of class-action suits, had their assets frozen in early May.
Last fall, the two took Bahamian bank to court so they could withdraw on accounts that once held $25 million.
The actual salting of the core samples from the Busang deposit was said to have been meticulously orchestrated by former Bre-X geologist Michael de Guzman.
It was de Guzman's suicidal leap from a helicopter over the Indonesian jungle in March 1997 that first signalled to investors that something was amiss.
The salting had begun in December 1993 and was intended to discourage the company from shutting down the Busang project.
The Bre-X scandal also earned Canada's stock markets a global reputation as an unregulated frontier where mining frauds are prevalent and easy to commit.
Junior mining companies were especially hard hit by the Bre-X boondoggle.
Since May, a barrage of shareholder lawsuits have been launched against Bre-X and its senior officials, the Toronto Stock Exchange, securities regulators and several brokerage firms which promoted the stock.
The company itself was petitioned into bankruptcy in November after an Alberta court refused to extend its protection deadline.
Walsh resigned as chairman shortly afterward.
Felderhof, de Guzman's boss, retreated to the Cayman Islands shortly after the engineering report on the Busang fraud was released. He has also denied any knowledge of the scheme. |
