Bula legal action against Stanley likely to be settled

Talks between Bula Resources and its former chairman and managing director, Mr Jim Stanley, are expected to result in the settlement of an action taken by the company against Mr Stanley.

The matter is due for mention before the courts on Monday and an announcement could be made as early as then. The action arose out of Bula's disastrous ventures in Russia in the 1990s and the company was seeking compensation and possibly the seizure of some of Mr Stanley's assets. The case was due for mention in the High Court two weeks ago but was put back.

One effect of any deal would be the lifting of a freeze on Mr Stanley's assets which was granted to Bula in August 1998. The assets are understood to include money, shares, and a house, Brownsbarn, near Thomastown, Co Kilkenny, the ownership of which is disputed.

Bula's involvement in two Siberian oil ventures in the 1990s led to losses of some £20 million (€25 million), with £12 million of that being lost in the deal at the heart of the legal action.

Both sides are understood to have spent considerable amounts on legal fees during the past two years, but the matter may now end with both sides walking away.

A deal would lead to the freeing up of some 74 million Bula shares, currently worth approximately £2.6 million. These could then be placed on the market by the company.

The shares, also currently the subject of a High Court freeze, belong to Mir Oil Development Ltd. Mr Craig Bond, son of the disgraced Australian tycoon, Alan Bond, has claimed ownership of the company by way of affidavit but has not come forward to repeat his claim in court.

Mr Lyndon MacCann, an inspector appointed by the Tanaiste, Ms Harney, in October 1997, inquired into the ownership of 101.5 million Bula shares transferred to Mir Oil Development Ltd as part of a deal involving Bula and a Siberian oil company, KMNGG. The deal was put together by Mr Stanley.

In his report the inspector found Mr Stanley had personally benefited by some £660,000 sterling (€1,103,864) from the sale of 28 million of these Bula shares. He also found that Mr Stanley was responsible for a bogus oil find report relating to an oil well in western Siberia.

The bogus report had the effect of stabilising the Bula share price around the time of the sale of the 28 million Bula shares owned by Mir. Dealing in the remaining 74 million Bula shares owned by Mir has been suspended pending resolution of the legal action.

Mr Stanley, who now lives in Moscow, refused to meet Mr MacCann when he twice travelled to the Russian capital, the second time armed with a High Court order directing Mr Stanley to attend for interview. Mr Stanley said he would attend a meeting on certain conditions which Mr MacCann refused to accept.

In an interview with The Irish Times following publication of the report, Mr Stanley contested the report's main findings. He maintained that Mir Oil Development was owned by Mr Craig Bond but Mr Bond had wanted to keep his involvement secret. Mr Bond also failed to meet Mr MacCann. Mr Stanley admitted he benefited from the sale of the Bula shares owned by Mir Oil, but this had to do with dealings between him and Mr Bond.