Indonesia, RCMP to investigate Busang gold case
JAKARTA (JP): The national police has formed a team of investigators in cooperation with Canadian police for a preliminary probe into the Busang scandal, the national police spokesman said yesterday.
Brig. Gen. Nurfaizi told reporters the team for the preliminary investigation consisted of several detectives and experts from the Ministry of Mines and Energy with Col. Arifin Rachim as team leader.
The team would collect data and evidence connected to the scandal to assess if a crime had been committed, Nurfaizi said.
The Indonesian government ordered police to investigate the Busang scandal after a report by independent consultant Stratchona Mineral Services Ltd. on Sunday claimed Canada's Bre-X Minerals Ltd. world's biggest gold find was a hoax.
Stratchona said the Busang site in East Kalimantan, which Bre- X said contained 71 million ounces of gold, contained no economic gold deposit and was a falsification of data.
Reports said Bre-X geologists had tampered the core samples taken from the Busang site before sending them to an assay lab in the East Kalimantan capital of Samarinda.
The government froze the activities of Bre-X and its subsidiaries in Indonesia one day after the report was released.
Nurfaizi said an officer from the Royal Canadian Mounted Police (RCMP), Douglas R. Herda, based in Singapore, had talked with the national police yesterday on the possible cooperation between the two police forces in probing the scandal.
"Indonesian and Canadian police have agreed to cooperate. If necessary, we can use their information or ask Canadian police to be witnesses," Nurfaizi said.
Canadian Ambassador to Indonesia Gary Smith said yesterday RCMP sent Herda to Indonesia after receiving two requests for an investigation into the scandal from Bre-X and the Ontario Securities Commission (OSC), Canada's top securities regulator.
In a letter to the RCMP, Bre-X Chief Executive David Walsh said fraud had been perpetrated against his company, but he did not identify the suspect. He also promised to fully cooperate with the police.
The OSC is conducting an investigation into Bre-X for possible violations of insider trading and disclosure laws.
"So far there isn't any suspect in this case," he said.
Smith said there was no extradition agreement between Canada and Indonesia but added this would not hamper the investigation.
Smith also said a number of journalists from Canada were in Indonesia to report on the case. Some of them wanted to write books on the scandal.
The Philippines embassy here said Thursday Herda and officials from Price Waterhouse had questioned three Filipino geologists in Samarinda who worked under their compatriot, Bre-X chief geologist Michael de Guzman. The three geologists were Manny Puspo, Bob Ramirez and Sonny Imperial.
Guzman mysteriously died in March after allegedly committing suicide by jumping from a helicopter on his way to Busang.
Several days after, Bre-X partner in the Busang project, Freeport McMoRan Copper and Gold of the United States, announced it had found no significant gold in Busang.
Bre-X shares drastically tumbled after the announcement and forced the company to hire Stratchona for an independent samples test.
The Busang project was 45 percent owned by Bre-X, 30 percent by the Nusamba group and its Indonesian partners, 15 percent by Freeport and 10 percent by the Indonesian government.
Nusamba, Freeport and the Indonesian government have withdrawn from the consortium.
Yesterday Bre-X announced it had fired its chief of exploration John Felderhoff.
Felderhoff, who now lives in the Cayman Islands, has expressed dismay over the tampering at Busang and denied any involvement. (jsk/cst)