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Gold/Mining/Energy : BRE-X, Indonesia, Ashanti Goldfields, Strong Companies. -- Ignore unavailable to you. Want to Upgrade?

To: Walter who wrote (28103)	2/11/1999 9:36:00 AM
From: alan holman	Respond to of 28369

For Thursday, February 11, 1999 Let all Canadian Bre-X shareholders in class-action suit, court urged By SANDRA RUBIN The Financial Post All Canadians who invested in failed Bre-X Minerals Ltd. should be allowed into an Ontario class-action lawsuit no matter where they live, an Ontario Court judge was told yesterday in an important round of certification arguments. At stake is the right of shareholders from anywhere in Canada to decide whether and where to go after those they hold responsible for the massive gold fraud. Options are narrowing. A federal court judge in Texas ruled last month that Canadians caught in the swindle will not be able to participate in a U.S. class-action suit. In Canada, only three provinces have class-action legislation -- meaning the thousands of former Bre-X shareholders outside Ontario, Quebec and British Columbia could be forced to spend substantially more to sue individually on their home turf. Having a national class in the Ontario suit is the most reasonable solution, and doesn't tie anyone's hands, said lead lawyer Harvey Strosberg. "A non-resident can avoid being subjected to the jurisdiction of this court by simply opting out," he argued. "This is easy to do and it's not expensive." Mr. Strosberg said his bid to form a single Canadawide class has the backing of lawyers who have filed suits in B.C. and Quebec. He also argued that, in any event, many investors outside Ontario have legitimate claim to the province's courts. "On the evidence that's before this court, on average about 50% of shares from non-residents were traded in Ontario, on the Toronto Stock Exchange." Tiny Calgary-based Bre-X was catapulted into stock market stardom on claims it had stumbled on one of the biggest gold strikes ever, deep beneath the Indonesian jungle. It amassed a market value of about $6-billion before imploding on news that someone had been adding outside gold to core samples to give the impression of a huge find. Judge Warren Winkler of Ontario Court, general division, said he is concerned that, should he throw open Ontario's doors to all comers, and the lawsuit fails, they could turn around and file a new suit in their home province. "A hypothetical Alberta resident could say: 'I didn't ask to be in this Ontario case. I didn't authorize Mr. Strosberg to act on my behalf. On whose authority did he represent me?' At the end of the day, fairness would dictate that you don't get two swings at the cat.." The judge also said he suspected some Canadians from outside Ontario might feel they were not receiving real justice with the case being prosecuted so far away. Thomas Heintzman, the lawyer for SNC-Lavalin Inc., said it would be a mess if people were allowed to file damage suits in multiple jurisdictions. "There cannot be a national class where the members are not bound by the judgment," said Mr. Heintzman. "People would file starting in the smallest province, say Prince Edward Island, and wait to see if they like the judgment. If not, they'd file in the next province." He also said many Canadian investors outside Ontario have already started suits. Arguments continue today.

To: Walter who wrote (28103)	2/11/1999 9:39:00 AM
From: alan holman	Respond to of 28369

cgi.canoe.ca

To: Walter who wrote (28103)	2/11/1999 9:44:00 AM
From: alan holman	Read Replies (1) \| Respond to of 28369

For Thursday, February 11, 1999 Accusations fly over Bre-X 'intimidation' Heated exchange: Felderhof lawyer blasts key witness for 'reckless' statements Canoe Money's Bre-X package By SANDRA RUBIN The Financial Post A U.S. lawyer for John Felderhof, Bre-X Minerals Ltd.'s chief geologist, is being accused of "secretly" sending a "threatening letter" to an expert testifying on behalf of shareholders who lost their savings in the notorious gold fraud. The allegation surfaced just as another important development for Bre-X investors was revealed. Late Friday, lawyers leading a U.S.-based class action filed a motion asking a Texas judge to reconsider a recent ruling barring Canadians from the suit. The charge of intimidation was levelled at Andrius Kontrimas -- Mr. Felderhof's main U.S. counsel -- by Houston lawyer Paul Yetter, who is leading the 23-firm class action lawsuit. In a Feb. 1 letter obtained by the Financial Post, Mr. Yetter accused Mr. Kontrimas of a "gross breach of ethical obligations" in writing to Michael Lawrence, whose testimony is being used to build the case that Mr. Felderhof was a participant in the $6-billion fraud. In an affidavit filed in U.S. Federal Court in March, Mr. Lawrence -- president of the Australian Institute of Mining and Metallurgy -- listed 10 points highly critical of the former Bre-X exploration chief. He started with Mr. Felderhof's remark five weeks before the salting scandal was exposed that he was "quite comfortable" with estimates that Busang contained 200 million ounces of gold. "The recklessness of his public statements are clear from the record," Mr. Lawrence said in his sworn statement. "He ignored the metallurgical, petrological and numerous other red flags. "He knew the deposit's tonnage and grade, metallurgy, etc. were too good to be true." Mr. Felderhof has said from his luxury Cayman Islands home that he played no role in the salting scandal and that he, too, was a victim. Mr. Kontrimas wrote Mr. Lawrence on Dec. 21 warning: "It has come to our attention that you have been making false and defamatory statements regarding our client and the operation at Busang. "We hereby put you on notice that our client intends to hold you and your company personally responsible for any false or misleading statements. To our knowledge, you have never been to Busang and therefore have no personal knowledge of how Bre-X conducted its operations there." Mr. Yetter fired back an angry letter, copied to all the lawyers working on the Bre-X file, accusing Mr. Kontrimas of using intimidation tactics. "Although the absence of gold at Busang is now an admitted fact, and the scandal ranks among the world's greatest business frauds, you threaten Mr. Lawrence that if he continues 'to rely on hearsay as fact' he does so at his own 'peril.' "Your letter is an arrogant and blatant attempt to bully Mr. Lawrence. It is inappropriate and a gross breach of ethical obligations to the court. I can only conclude that you intended to try to intimidate Mr. Lawrence." Mr. Kontrimas denied he was bullying anyone and said in an interview that he felt he had to act after learning Mr. Lawrence has been publishing papers about Busang containing statements he says will be proven untrue. "All we did is tell him to get his facts straight and not to rely on hearsay," Mr. Kontrimas insisted. "He's a person that has some stature as president of the Australian Institute of Mining and Metallurgy -- but he hasn't been to Busang and he doesn't have the facts. So he should keep his powder dry until the trial." Meanwhile, in a motion filed Friday evening, lawyers asked Federal Court Judge David Folsom to reconsider last month's key ruling that bars Canadians from the Texas-based suit on the grounds none of the damage they suffered was linked directly with actions in the United States. The motion points out there are two affidavits filed with the court from Canadian shareholders who said they "directly relied" on resource estimates by J.P. Morgan & Co. in the decision to buy Bre-X stock. The Canadian shareholders each swore they read a 1996 J.P. Morgan statement pegging Busang as a 150-million ounce deposit, and each said he was "impressed" by the statements and "relied on the J.P. Morgan representations" in acquiring shares of the Calgary-based exploration firm. The 14-page motion also asks the judge to reconsider on legal grounds: it says Canadian shareholders do not have to prove "direct reliance" on misrepresentations made in the United States in order to be eligible under U.S. securities law and, the filing also says, under U.S. law, there is a concept called "supplemental jurisdiction," which allows a federal judge to hear non-federal claims that arise out of an ongoing case. If the motion is denied, the lawyers still have the right to appeal the main ruling.