Vancouver Sun Article -- 11/21/98 -- Page E4
3 West Van residents accused of fraud in suit filed by Ikar
David Baines
Sun Business Reporter
A North Vancouver company that claims to be developing a multibillion-dollar mineral deposit in Tajikstan alleges a Cyprian bank run by three West Vancouver residents defrauded it of $230,000 US.
In a lawsuit filed in B.C. Supreme Court, Ikar Mineral Corp. also claims that Renfrew Security Bank & Trust Ltd. orchestrated a huge short-selling scheme designed to destroy the market for its shares.
Ikar, which trades on the virtually unregulated over-the-counter market in the United States, claimed last March to have acquired mineral concessions in Tajikistan containing $7.2 billion worth of precious and base metals.
"We are confindent our Rushan concession will prove to be one of the world's most significant repositories of precious and base metals," chief executive officer Randall Andrus told shareholders. Mining analysts were skeptical, however, and the company's stock price, which peaked at $3.75 US in January, has since declined to 40 cents.
In a statement of claim filed Thursday, Ikar claims it approached the bank, which purports to be registered in Nicosia, Cyprus, to obtain a line of credit to finance its Tajikistan property.
It says the bank's chait and chief executive officer is Buman Shefik, his assistant is Lee Gahr, and their agent is Shefik's wife, Mojgan. All reside in West Vancouver and all are named as defendants.
Ikar says it also arranged for interim financing through third parties, including securities dealer Thompson Kernaghan & Co., and deposited the proceeds into the Cyprian bank. How much was deposited is not stated.
Ikar says that, from time to time, it drew on its line of credit and the interim financing, and was paid by wire by Shefik through a brokerage account at Wolverton Secureties, or by Skefik's wife through offshore accounts, or by Shefik through a brokerage account at Wolverton Secureties, or by Shefik's wife through her bank account at Canada Trust in West Vancouver.
The company alleges that, in late August, it received a statement from Shefik showing that the bank had removed $169,597 US from Ikar's account, purportedly for service and transaction fees. It also alleges the bank refused to release the remaining $60,062 US on deposit.
Ikar claims the bank, through its business dealings with Ikar, acquired confidential information about the company, including the fact that it needed more money to fund its Tajikstan project, and that if the project wasn't funded it might forfeit its rights to the property.
On the basis of this and other confindential information, the defendents "embarked on an aggressive short-selling scheme to manipulate the price at which the stock traded downward to an artificially low level," Ikar alleges.
The company claims Ikar sold more than six million shares through various trading accounts, including an account at Wolverton.
It says the motive was either to depress the stock price and make a profit, or to put the company out of business.
The company further alleges that, to cover their short position, the defendants did not buy back shares in the open market, but rather tendered an offer to certain Ikar shareholders to exchange their shares for shares of a company called Elk City Mining Co., thereby violating the B.C. Securities Act.
Ikar also claims the bank is not registerd to do business in Canada or any other jurisdiction, and was "nothing more than a name under which Shefik and Gahr carried on business, thus creating the illusion of legitimacy to further their illegal activities."
The lawsuit asks the court to order the defendents to repay $230,000 US and disgorge profits from their short-selling scheme, plus other forms of relief.
None of the defendants could be reached for comment Friday. |
