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Bre-X Minerals Ltd. collapsed in 1997 amid allegations its massive gold find in Indonesia was a fraud, prompting a flurry of police investigations, regulatory probes and lawsuits seeking up to $5-billion in damages for shareholders. Now, 16 years later, the saga is petering out with shareholders no richer and the mystery about what happened at Bre-X’s gold find in Busang still unsolved.
Deloitte & Touche Inc., the bankruptcy trustee charged with recovering money for investors, has given up its legal action against several former Bre-X executives, banks and other companies involved in the gold project. In court filings, Deloitte argued it had run out of money to pursue the case and probably wouldn’t win anyway. A class-action lawsuit launched in Ontario on behalf of shareholders has also run out of steam and will likely be dropped now that the trustee’s case has ended.
“This motion is the anticlimax of the Bre-X saga,” Ontario Superior Court Justice Paul Perell said in agreeing to discontinue the trustee’s case this month. An Alberta court is expected to make a similar ruling in May on the trustee’s request to end the case there as well.
“That’s pretty much it,” said Calgary lawyer Clint Docken, who has been involved in various cases on behalf of investors for years. Mr. Docken said the trustee’s suit was the best chance shareholders had to recover something.
“What has the trustee got to show for 16 years of litigation? Almost nothing,” he said. “Biggest fraud in Canadian history and no accountability. It’s very sad. We’ll never know [what happened].”
Mr. Docken noted that while shareholders have gotten next to nothing, Deloitte received $3.9-million in fees and paid its lawyers $8-million. All that is left in the Bre-X estate is $79,000, according to court filings. A lawyer representing the trustee was not available for comment.
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