The Bula Resources saga has become murkier and more bizarre, if that is possible. It was bad enough having Russian directors fighting with the board, bad enough having high hopes of commercial oil in Russia dribbling to less than a trickle; but now a proposed sale of Bula shares by Mir Oil has had to be halted by a High Court order because the identity of the owner of the shares is unknown.

With Bula shares dragging along the ground at 1p to 1.5p, it might be tempting to dismiss the concerns about the identity of the owners of Mir Oil as not particularly relevant. Wrong. Not only is it relevant, identity is essential.

Why? Because Bula gave Mir Oil 101.56 million of its shares in return for a 25 per cent stake in Mire Space International which has rights to 50 per cent of the Salymskoye Oilfield in western Siberia. The value of that investment is now highly questionable. The subsequent sequence of events is important.

In October 1996, Bula, in a bullish statement by its then executive chairman, Mr Jim Stanley, told its shareholders that it had successfully tested oil at the Salmskoye oil field.

Four months later, in February 1997, Ms Susan Neil, a director of Mir Oil informed Bula that Mir Oil had "recently" sold 27.83 million of the Bula shares.

In the following March and April, Bula alerted its shareholders that the flows from the well were not as good as originally thought.

A short while later Bula announced Mr Stanley's resignation and a day later Bula announced a postponement of the start of production. Those 27.83 million shares are understood to have been sold to a London-based institution. Mir Oil would have received between £600,000 and £800,000, a sizeable sum. And there could be insider trading implications if a connection is established between Bula and Mir Oil. Counsel for Bula said in court that there had been a suggestion that Mr Stanley may have had an interest in Mir Oil. But he has consistently denied that he or his family, or any person connected with him, had any interest in Mir Oil. So who owns Mir Oil? Mr Stanley said he believed Mr Charles Ellis was the person entitled to the ultimate beneficial interest in Mir Oil. Ms Neil subsequently advised that Mr Ellis was no longer the beneficial owner of Mir Oil nor had he been for some time.

Mr Ellis who operates from offices in Johannesburg, South Africa told Bula that he had no knowledge of, nor had he any dealings with Mire Oil or Mir Space, and that he has never owned any shares in Mire Oil or Mir Space. Speaking to The Irish Times he confirmed his statement to Bula. Mr Stanley tried to interest him in sourcing South African sugar for the Russian market but the deal fell through because the price of sugar was too high. He said he was "flabbergasted" that his name was connected with Mir. "I met him (Mr Stanley) while he was in South Africa on holidays ... our daughters met on the beach ... we developed a friendship ... I introduced him to a mining house". Mr Ellis who noted that his full name is Charles Lloys Ellis is involved in property and said he has never done business in Russia and has not been involved in exploration. The sale of the remaining 84.2 million Bula shares was frozen by the High Court pending an investigation into who the beneficial owner is. They have a value of around £1 million. Bula has an option over the remaining 75 per cent of Mir Oil. This would cost it an additional 300 million new Bula shares, valued at more than £3 million. If the owners of Mir Oil do not voluntarily identify themselves then the only course open to Bula will be to take legal action against a named person or persons. That could prove to be costly. Bula will have to weigh up the costs against the financial benefits it would receive in return. It owes it to the existing shareholders to pursue the matter with vigour but if financial constraints dictate a dropping of the case, then the Minister for Enterprise, Trade and Employment, Ms Harney should consider sending in inspectors. (The Department and the Irish Stock Exchange have been making inquiries).

However, it would be wrong to conclude that an investigation by inspectors would result in a punishment for any wrong doing. The CountyGlen saga proves that contention all too well. That investigation led to the Revenue Commissioners winding up a hotel company. And the inspector's report made many important revelations, but these were disputed by the main parties involved. A spate of litigation and counter litigation followed but the actions were dropped when the parties indicated that they were going to fight the constitutionality of the use of the inspectors' report as evidence. That outcome could have serious implications for future inspectors' reports. However, that prospect should not deter Ms Harney's department from investigating the identity of the owners of Mir Oil if Bula does not succeed with its own investigations.