Bula board calls third e.g.m. to remove Russians

THE board of Bula Resources has decided to call a third extraordinary general meeting in as many months, as it continues to try to dismiss two of its Russian directors. A date for the new meeting, which will consider motions to dismiss the Russian directors, will, be set shortly.

The board of the company met after an extraordinary general meeting in Dublin yesterday at "which shareholders authorised the issuing of shares to raise money to fund the group's Russian activities. No details of any planned fund raising were disclosed.

Yesterday's meeting was the second of two extraordinary general meetings scheduled for this month. The first, due to have been held last week, had to be abandoned after the two Russian directors, Mr Alexander Marichev and Ms Tatyana Kirillova, obtained an injunction. The two directors claimed they had not been given sufficient notice of the meeting, which was to consider motions for their removal.

Mr Marichev and Ms Kirillova are major shareholders in the Russian Corporation, a former business partner of Bula in the former "Soviet Union.

The Irish company paid the Russian Corporation more than £6 million in cash and shares in 1985 for an option over shares in another Russian company, AkiOtyr, which has significant oil interests in Siberia. Under the option agreement, Bula could acquire 51 per cent of Aki Otyr by issuing 274.5 million shares to the Russian Corporation. This would have made it the largest shareholder in Bula with around 25 per cent.

However, the deal collapsed earlier this year over doubts concerning the Russian Corporation's title to the shares in Aki Otyr. Bula is currently taking legal action against the Russian Corporation and, last April, the company's board sought the removal of the two Russians. Bula has also begun direct negotiations with Aki Otyr.

Mr Marichev attended yesterday's meeting but declined to comment. Shareholders at the meeting raised the issue of the Russian Corporation deal. However, Mr Jim Stanley, the Bula chairman, declined to give any further details, claiming he was restricted because of the pending legal actions.

One shareholder, Mr Enda Bannon, asked if the company was taking any legal against the British law firm which advised on the Russian Corporation's title to the Aki Otyr shares. Mr Stanley replied that Bula was looking at a number of options to recover some of the £8 million it has spent on the Russian Corporation deal to date.

Mr Bannon also asked what assurances Bula had that Aki Otyr really held licences to produce oil from a field in western Siberia valued at $180 million (£115.5 million). Mr Stanley did not answer the question, saying that it was related to the legal proceedings.

Another shareholder, Mr Angus Duncan, questioned the logic of seeking shareholder permission to issue more shares to raise funds at a time when the share price was so low. Mr Stanley said that no other type of finance was available for such projects.

Bula will not be able to borrow money to fund development until it has significant cash flow from its current Russian project at Salmyskoye. This project was on time and under budget, he told shareholders. However, further funds had to be raised to ensure it could be brought to the stage where it would produce oil in commercial quantities.

Shareholders approved the resolution giving the board power to allot shares by 414 million votes to 80 million. A motion to consolidate Bula's shares was not proceeded with.