Inspector's Mir search to span seven jurisdictions

A government inspector is trying to establish the mystery owner of two companies in the British Virgin Islands who were given shares worth £2.5 million by Bula Resources plc as part of a deal involving a Siberian oil field.

Barrister Lyndon McCann will have to make enquiries in up to seven jurisdictions. His brief will involve him in enquiries here, in Russia, the Channel Islands, the British Virgin Islands, Britain, South Africa, and possibly Norway, where many of the professionals who worked on the Siberian well have their homes.

Bula has issued High Court proceedings against one of the central figures involved in the saga - its former chairman, Mr Jim Stanley. However, Mr Stanley has not communicated with the company since September 8th last and his whereabouts are unknown.

The inspector is enquiring into the beneficial ownership of two companies registered in the British Virgin Islands, Mir Space International and Mir Oil Development Ltd. He is also enquiring into the circumstances surrounding a misleading announcement in October 1996 concerning results from a test well Bula and its Russian partners had drilled in Siberia.

He will also investigate the sale by Pictet International Management of its Bula shares between October 1996 and February of this year. Pictet is a Swiss bank with a London operation involved in fund management.

The inspector has been asked to establish who was the beneficial owner of the Bula shares sold by the bank as they were sold after the disappointing well was sunk, but before it became publicly known that the results announced were misleading. There is no evidence to link the sale of the shares to the disappointing, but concealed, drilling results. It is understood that the bank made an overall loss from its trading in Bula shares.

Mir Oil received 101 million shares from Bula Resources plc in September 1995 as part of a deal in which Bula would get a stake in a Siberian oil field. In November 1996 and January of this year, some 28 million of these shares were sold on the market, gaining some £700,000 for the beneficial owner.

The High Court has ordered that the remainder of the shares cannot be sold until the beneficial owner of the shares makes his identity known to Bula. The order was extended on Monday for a further three weeks.

The deal involving the oil field was set up by the former chairman and managing director of Bula, Mr Stanley. It involves Bula and a Russian company called KMNGG which holds the licence to the Siberian oil field. The Bula involvement is by way of the Virgin Islands companies Mir Oil and Mir Space.

A High Court hearing in September heard that Mr Vladamir Bogatchev, of KMNGG, said his company, when negotiating the deal with Mr Stanley, believed at all times that they were dealing with Bula, and that Mir was set up by Bula for tax reasons.

The court was told that there was "some suggestion" that Mr Stanley was the beneficial owner of Mir at the time the deal was established. Mr Stanley told his fellow Bula directors at the time that neither he, nor anyone connected with him, had any interest in Mir. He said the owner was a Mr Charles Ellis, of South Africa.

However, Mr Charles Lloys Ellis, an acquaintance of Mr Stanley, has told Bula and The Irish Times that he never had any involvement with Mir, or with any oil deal in Russia. Ms Susan Neil, a Jersey Islands-based nominee director with Mir, told The Irish Times that Mr Stanley was not on the board of Mir. She said it was true that Mr Stanley's Bula shares were registered to her home address on Jersey, but that this was a favour she had done him some years ago, when he was between addresses, and was of no bearing in relation to the ownership of Mir.

Mr Stanley resigned from Bula in April of this year. Since being told on September 8th by Mr Lloys Ellis that he has nothing to do with Mir, Bula has been trying to contact Mr Stanley but with no success. The Irish Times has been told he is no longer living at his former home, Brownsbarn House, Thomastown, Co Kilkenny, or in a flat he rented up until September in Grosvenor Square, London.

A Stockholm-based, Russian-English translator, Ms Elana Loven, who worked as a consultant for Bula and accompanied Mr Stanley in Russia when he was negotiating the deal with KMNGG, said she never witnessed him preporting to represent Mir. She said she did not know who owned the Mir companies and could not explain how the Russians had come to the view that they were fronts for Bula.

During 1996, Bula spent $10.7 million (£7.13 million) on the Siberian oil field. However, its Russian partners say they now want to buy out Bula. "We will pay them compensation," Mr Bogatchev told The Irish Times.

Bula company secretary, Mr Ivan Walpole, said the company had not yet decided if it would withdraw from the Russian deal but said they would consider "an attractive offer" if one were made.