Bula may press for return of shares transferred to Mir

The return of 74 million shares transferred to Mir Oil Development Ltd will be sought if it emerges there were links between the company and former Bula chairman and chief executive, Mr Jim Stanley, a Bula Resources e.g.m. heard yesterday.

The shares, which are currently frozen by order of the High Court pending the establishment of the identity of their beneficial owner, are worth approximately £750,000. Another 27 million shares which were transferred as part of the deal have already been sold.

During the e.g.m., held to approve an increase in the shareholding held by the investment company Morgan Grenfell, there were questions from the floor about the company's two disastrous Russian deals, both of which were set up by Mr Stanley.

Shareholder Mr Enda Bannon suggested that the company freeze any shares held by Mr Stanley. The company was spending a lot of money "pursuing this guy" and it would be better to have him "taking action against us".

Mr Donal Roche, managing partner with the company's solicitors, Matheson Ormsby Prentice, said the 74 million shares had been frozen on the basis that they were beneficially owned by Mr Stanley. It is difficult to freeze an individual's shares when nothing is proven against the individual. However, the point was well made, he said.

The meeting heard concerns about the slowness of developments in the legal action the company is taking in relation to an earlier Russian deal involving the Russian company, Aki Otyr.

However chairman, Mr Tom Fitzpatrick, said litigation is expensive and not something to be rushed into. "We have been as aggressive as our advisers have allowed us to be," he said.

Asked who was going to pay for the report of the Government appointed inspector, Mr Lyndon MacCann, Mr Fitzpatrick said that was an interesting point. Normally such appointments are funded by the state. However depending on the findings of the inspector, the court could make a decision on who should pay the costs.

Mr Bannon said the company "has successfully lost £23 million in the last three years." Any substantial investments made had been disastrous. "Now we are moving into some of the most volatile countries in the world. I do not approve of it." He would be voting against the placement with Morgan Grenfell. "The more money we give you the more money you seem to lose."

The shareholders heard that an agreement between Bula, Canadian Occidental, and the National Oil Company of Libya had been lodged for ratification with the General People's Committee of Libya. No response had yet been had from this committee but the company `'does really believe this deal will happen," said chief executive Mr Pat Mahony.

The company was also involved in Iraq but would not be signing anything until sanctions against that country are lifted. The proposed deal in Yemen would have to be negotiated within three months under the rules operating in that country. Bula had made good contacts in these countries and there was a lot of interest in the region, Mr Mahony said.

Shareholder Mr Dermot O'Toole said Mr Stanley was gone but a lot of his phraseology lived on. He quoted from the chairman's statement, where Mr Fitzpatrick referred to an "extremely successful" strategy, a "highly attractive" Libyan site and Bula's "highly attractive" exploration opportunities. He suspected this was undue optimism. "Colonel Gadafy and Saddam Hussein are strange allies, but who knows?"

The shareholders approved the placement of 35.5 million new shares with Morgan Grenfell, bringing its shareholding to 14.4 per cent. Investors Capital International have increased their shareholding to 12.4 per cent, having purchased a further 90 million shares. The funds are to be used in North Africa and the Middle East. Mr Ivan Walpole and Mr William Lowry were elected to the board.