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Gold/Mining/Energy : YBM Magnex Intl Sees Revenue Growth 30-35%/Yr In MagnetOp -- Ignore unavailable to you. Want to Upgrade?

To: Mr Metals who wrote (242)	8/18/1998 12:10:00 AM
From: Adrian du Plessis	Read Replies (1) \| Respond to of 314

YBM's OSC hearing on indefinite hold By SANDRA RUBIN The Financial Post Tuesday, August 18, 1998 Battered YBM Magnex International Inc. had its Wednesday date before the Ontario Securities Commission postponed indefinitely, the regulator said in a surprise statement late yesterday. The cancellation of the hearing leaves bewildered shareholders in the dark over whether their stock will ever trade again. Shares in the Philadelphia-based magnet manufacturer (ybm/tse) have been frozen since its offices were raided May 13 by the FBI as part of an organized crime probe. The Toronto Stock Exchange has put the issue on listing review. But the OSC said a hearing to consider imposing a permanent trading ban will be not be held "unless and until" YBM files audited financial statements. The firm has been unable to find auditors since its regular accountants, Deloitte & Touche LLP, quit in June without signing the 1997 financials. Deloitte was concerned about "certain contracts, entities and individuals" as well as the possibility "one or more illegal acts may have occurred that may have had a material impact on the 1997 financial statement." The U.S. auditing firm was supposed to be the commission's star witness at this week's hearing but declined to appear voluntarily to give evidence, pulling the rug out from under OSC plans. Sources say Deloitte is concerned its testimony may be used against it in a possible class action by YBM investors. The stock was worth nearly $1 billion in March and was listed on the TSE 300. Most fund managers have now written it down to zero. YBM has said it is still carrying on its business, although it has not returned recent phone calls inquiring about continuing operations.

To: Mr Metals who wrote (242)	8/19/1998 12:55:00 PM
From: Adrian du Plessis	Read Replies (2) \| Respond to of 314

THE FINANCIAL TIMES OF LONDON WEDNESDAY AUGUST 19 1998 Americas YBM: Hearings into finances postponed By Edward Alden in Toronto The Ontario Securities Commission has postponed indefinitely hearings into the finances of YBM Magnex International, the industrial magnet maker, raising the possibility that the company's shares may never trade again in Canada. The OSC said late on Tuesday that hearings would not be held until YBM files audited financial statements, and added that a temporary cease-trade order issued in May would remain in place until hearings were concluded. The company's auditors, Deloitte & Touche, resigned in June saying they could not ensure that the company's 1997 financial results were free from error and fraud. YBM has since tried unsuccessfully to find a new auditor. Its business operations span North America, eastern Europe and Russia and only a handful of large international accounting firms would have the capabilities to do such a thorough audit. Company officials did not return calls yesterday. Joseph Groia, YBM's Toronto lawyer, referred all questions to the company. YBM said last week that it continued to review its business operations in eastern Europe to address some of the concerns raised by the auditors. YBM's market value reached about C$900m (US$600m) earlier this year, and the company was still worth more than C$600m when trading was halted at C$14.35 a share by the OSC on May 13. If the stock does not resume trading, the resulting losses would make it the second biggest stock market fraud in recent Canadian history, behind only the C$6bn collapse of Bre-X Minerals last year. Several of the company's executives and directors are also reported to have sold large volumes of stock just before trading was suspended in May. The full story behind YBM's downfall remains murky. The company was raided by the US Federal Bureau of Investigation in May as part of a criminal investigation, though no charges have been laid. One of the company's founders and large shareholders, Semion Mogilevitch, a Ukrainian-born financier, was barred from the UK in 1995 following an investigation into alleged money laundering activities involving Russian organised crime. The OSC late last year undertook a due diligence investigation of YBM, but ignored warnings from industry experts that the company had attributed almost a quarter of its 1996 revenues to a procedure for extracting sulphur from oil that technical experts said had never been used commercially, and may not even exist. A former Ontario premier, David Peterson, who was on the company's board of directors, resigned last week. YBM's chief operating officer Igor Fisherman, who was accused in an internal company investigation of significant breaches in corporate policy and common business prudence, also agreed to step down.