A charitable foundation headed by the son of the Libyan leader, Col Muammar Ghaddafi, has become a 2 per cent shareholder in Bula Resources after a share placing.

The Ghaddafi International Charitable Foundation, through a wholly-owned subsidiary One Nine Investment International, bought 50 million Bula shares at €0.018 (£0.014) each - a total cost of €900,000. The 50 million shares are equivalent to 2.2 per cent of Bula's enlarged share capital.

Bula has also placed 25 million shares with a Libyan investment company, O&M Management, and another two million shares with private investors. A total of €1.38 million has been raised through the placing.

A Bula spokesman said the charitable foundation was controlled by members of Col Ghadaffi's family, although the Libyan leader himself was not directly involved. It is understood the foundation is headed by Colonel Ghaddafi's son, Mr Sayf Ghadaffi.

The spokesman said he did not know who the beneficiaries of the Ghaddafi International Charitable Foundation were, although it is understood that the foundation's broad aim was to help Muslims throughout the world.

Bula has been waiting for almost a year for a decision from the Libyan National Oil Company on applications it has made to start exploration on two licence areas.

Initially, Bula submitted a successful application in a joint venture with Canadian Occidental. The Canadian company then withdrew and has been replaced with another partner whose identity has yet to be disclosed. The national oil company has yet to decide whether to approve the new partner. The Bula spokesman said he hoped the investment would assist Bula's application for an exploration and production sharing agreement.