Misinformation claim in Stanley affidavit

Members of the board of Bula Resources pursued "a campaign of misinformation" against their former chairman and chief executive, Mr Jim Stanley, the businessman has alleged in the High Court.

Mr Stanley, in an affidavit, said he laid down conditions for any meeting with the Government-appointed inspector, Mr Lyndon MacCann, because he was concerned that a "witch hunt" was being perpetrated against him by the directors of Bula, the media, and "perhaps inadvertently", by Mr MacCann. The Bula directors were trying to "distance themselves from the failures in Russia", he said.

Mr MacCann was appointed in October, 1997, and reported in July of this year. Mr Stanley refused to meet with him despite an order from the High Court that he do so.

Mr Stanley told the inspector that he would "seek to rely on my rights under the European Convention on Human Rights regarding privilege against self-incrimination". He sought an assurance that any answers given to questions would not be used against him in criminal proceedings, according to Mr Stanley's affidavit.

Mr Stanley said that from the outset of his investigation, Mr MacCann had a suspicion that Mr Stanley had an interest in Mir Oil Development Ltd. The basis for this suspicion was not given in his report. "Throughout the entire (MacCann) report there is no direct evidence from any witness that I was the owner of Mir Oil, which I always maintained and still maintain I most certainly was not."

Mr MacCann "was acting from the start on a presumption of guilt on my part and the entire investigation proceeded on the basis that somehow or other I had to prove my innocence," Mr Stanley said.

He said Mr MacCann "acted on suggestions and preconceptions as opposed to evidence" and "he was not so much interested in hearing what I had to say as of putting a particular version of events to me".

Mr Stanley said much of the information and documentation "apparently relied upon by (Mr MacCann), came from Bula", even though it was "self-serving material" which allowed the directors distance themselves from the oil deal at the heart of Mr MacCann's report. He also said that Mr MacCann was wrong when he decided not to believe a claim from Mr Craig Bond that he was the owner of Mir Oil.

Mr MacCann, in his report, expressed the view that there was "no commercial reality" to the version of events put forward to Mr Bond, Mr Stanley said. But "what amounts to commercial reality in the West and in Russia are very different things".

He alleged that the reason the name Mr Charles Lloys Ellis was not put in the register of beneficial interest maintained by Bula, was because the directors knew that Mr Lloys Ellis was not the true beneficial owner of Mir Oil "and that his name was put forward to protect the identity of the true owner". At the time the deal between Mir and Bula was being agreed, Mr Stanley had informed the board that Mir was owned by Mr Lloys Ellis.

The former chairman said that when he resigned from Bula in April of last year "it was agreed that I would be paid £60,000 in consideration of loss of office, of which £15,000 was actually paid so far. No allegation of any kind was made by Bula at that stage."

Mr Stanley said he was entitled to know the reasons why the Tanaiste, Ms Harney, chose to appoint an inspector. Also, in so far as she appointed Mr MacCann to inquire into "the Well 705 situation", Ms Harney ought to have known that such an investigation was outside the jurisdiction of inspectors appointed under section 14 of the Companies Act.