Bre-X faces multiple suits following Busang debacle

MONTREAL (JP): Embattled junior mining Canadian firm Bre-X Minerals Ltd, after being suspended from operating in Indonesia and delisted from the Toronto Stock Exchange, now faces multiple lawsuits following the Busang debacle in East Kalimantan.

Most local newspapers still run the Busang debacle on their front pages and report that the infamous Bre-X was being assaulted on several new fronts.

Bre-X faces at least three legal actions; from disappointed shareholders, the Ontario Securities Commission, the Toronto Stock Exchange (TSE) and also possibly from the Indonesian government.

Bre-X has been hit with at least seven class action suits from shareholders seeking repayment of their losses from investing in Bre-X shares.

Harvey Strosberg of Winsor, Ontario, lawyer for the only Canadian group to have filed a class action suit, has named Bre-X and its officials in the lawsuits.

The named officials include Bre-X chairman and chief executive David Walsh, his wife Jeanette, who acts as corporate secretary, and chief geologist John Felderhof.

Harvey Strosberg has said he is looking to broaden the list of defendants to include brokerage firms for advising people to buy the shares.

Canada's premier exchange TSE delisted Bre-X Wednesday saying that it "no longer meets the required listing standards."

After delisting Bre-X, TSE is almost certain to seek another legal action against the disgraced company for alleged insider trading practices and disclosure of incorrect, misleading information.

The Indonesian government has frozen all activities of Bre-X and its subsidiaries in Indonesia. The freeze affects Bre-X and Bresea, which last month were awarded contracts of work to explore for and develop minerals in Indonesia.

Minister of Mines and Energy Ida Bagus Sudjana has said that the national police have been ordered to investigate the disparity between Bre-X's tests and those by Strachcona.

Minister of Industry and Trade Tunky Ariwibowo, who was now in Montreal for an Asia-Pacific Economic Cooperation meeting, said yesterday that the Busang debacle was more a problem for Canada than for Indonesia.(rid)