Gulf has been under investigation by the RCMP's new white-collar crime unit since February
Gulf Int'l shares halted amid bribery allegations
Company officials also under investigation for allegedly stealing corporate funds
By KAREN HOWLETT AND PAUL WALDIE
Friday, April 9, 2004 - Page B5
Stock market regulators halted trading in the shares of Gulf International Minerals Ltd. yesterday amid revelations that officials involved with the company are under criminal investigation over allegations that they bribed government officials and pillaged corporate funds.
A report prepared by a Toronto law firm for a special committee of Gulf's board of directors outlines a series of allegations against current and former directors, officers, shareholders and employees of the company. The report was sent to the board two weeks ago, said a source familiar with the matter.
Market Regulation Services Inc. (RS) halted trading at 3:24 yesterday afternoon so that the company could disclose the latest developments, said RS spokesman Doug Maybee. The shares last traded at 35 cents each on the Toronto Stock Exchange, down 1.5 cents.
Company officials could not be reached for comment yesterday.
Gulf has been under investigation by the RCMP's new white-collar crime unit since February, according to documents obtained by The Globe and Mail. That was the same month Alastair Ralston-Saul was forced to resign as chief executive officer and a director of Gulf, a small gold mining company based in Vancouver with properties in British Columbia and Tajikistan, a former Soviet republic.
Mr. Ralston-Saul, a brother-in-law of Governor-General Adrienne Clarkson, stepped down after lawyers conducting an internal investigation concluded that he misappropriated about $30,000 (U.S.) and devised a scheme to receive a secret profit of approximately $1.5-million on a proposed acquisition. He has defiantly proclaimed his innocence.
The report prepared by McMillan Binch LLP implicates several others in the scandal, in addition to Mr. Ralston-Saul.
"To our mind, there are some very serious allegations that have caused us some great concern," Bill Majcher, head of the RCMP's Integrated Market Enforcement Team in Vancouver, said in an interview yesterday. "We are in the process of determining the validity of the allegations. If they bear themselves out, we will proceed and recommend criminal charges."
Mr. Majcher said the RCMP is concerned not only about past events at Gulf but wants to ensure that steps are taken to preserve all evidence.
On Feb. 24, his office wrote to McMillan Binch, notifying it that the RCMP had launched a criminal probe into the activities of certain current and former Gulf employees.
The letter, a copy of which has been obtained by The Globe and Mail, states that altering, concealing or destroying evidence is a criminal offence. Anyone who "willfully attempts, in any manner, to obstruct, pervert or defeat the course of justice is guilty of an indictable offence," it says.
Mr. Majcher said the RCMP has been in contact with its liaison officer in Britain -- Gulf's main business office is in London -- as well as the British Columbia Securities Commission.
Sources familiar with the probe said the B.C. regulator has been asked to replace Gulf's entire board with a court-appointed monitor. However, the sources said the regulator did not think it had enough evidence to take such a step.
Sasha Angus, head of enforcement at the BCSC, declined to comment yesterday beyond saying, "We are aware of the [company] and we are taking steps we think are appropriate."
Mr. Ralston-Saul, 59, is the older brother of John Ralston Saul, who also sat on the Gulf's board for about a year in the late 1990s. John Ralston Saul (who does not hyphenate his name) resigned from the board in August, 1999, when his wife took up duties at Rideau Hall.
The McMillan Binch report outlined a series of allegations against Alastair Ralston-Saul, including suggestions he used $30,000 (U.S.) of company money to pay for an apartment for Lola Shamolova, the manager of the company's office in Dushanbe, who was alleged to be his mistress.
Mr. Ralston-Saul, who is married and lives in London, has denied that Ms. Shamolova was his mistress. "It's absolutely not true. She's my daughter's best friend. She's a young girl," he told The Globe in February.
He also said that he bought the apartment in Dushanbe as an investment. "You might say that I probably shouldn't have done it the way I did it, but I mean the fact is it was a great opportunity. I just grabbed it quickly and just paid the company back."
In a statement included in the report, Ms. Shamolova said she lived with Mr. Ralston-Saul for five years and he had promised to buy her an apartment. "He sent me money in the amount of US$30,000 for the purchase of an apartment," she said. "I bought an apartment for the amount of US$26,000; the remaining money I used for the redecoration of the apartment."
The report also alleges Mr. Ralston-Saul repeatedly used company money for trips, cars, entertainment, personal legal expenses and to arrange bribes. The report also claims Mr. Ralston-Saul flew to Canada with Ms. Shamolova in June, 2002, and they "stayed as guests at Rideau Hall for two nights and three days."
Mr. Ralston-Saul told The Globe he is not close to his brother and that the expenses were authorized.
theglobeandmail.com |
