Bula liquidator aids ODCE inquiry

The official liquidator appointed to Bula Resources is co-operating with the Office of the Director of Corporate Enforcement (ODCE) in an inquiry into the company's lodgement of a $1.5 million deposit in Bahrain.

The liquidator, Mr James Stafford, has named three people he considers to have been directors of the company in the year prior to his appointment.

The appointment and resignation of directors to the company during the period was not always notified to the Companies Registration Office. The three named are: Mr Tom Kelly; Mr Timothy Torrington; and Mr Omar Yazigi.

Mr Stafford will now have to file reports to the ODCE within six months giving his view as to whether he should be absolved from going to the High Court to seek the named directors being restricted in their right to operate as company directors in this jurisdiction.

Bula has 45,194 shareholders. The shares in the formerly listed company are now considered worthless.

"The High Court has ordered that the company's sole remaining director, Mr Omar Yazigi, submit a sworn statement of affairs to the High Court by April 5th, 2004," Mr Stafford says in a report to shareholders.

"Such a sworn statement of affairs has to be in a statutory format, and it should list all of the company's assets and creditors. As soon as I receive this statement of affairs, I propose to reproduce a summary of it.

"One of the issues that Mr Yazigi will have to address in the statement of affairs is the impact of certain guarantees which were purportedly provided to all of its Irish incorporated subsidiaries for the year 2001. Note 21 to the audited accounts of the company for the year quantified these liabilities at €462,000."

Mr Stafford notes that at the time of his appointment there was €254,212 in the company's bank accounts. He has now taken control of this money.

He states that, as liquidator, he has to investigate the reasons for the company's liquidation and unusual transactions.

"One of the transactions I am investigating is an investment of $1.5 million in Bahrain which was made in 2001.

"ODCE had commenced an investigation into this investment prior to my appointment as liquidator, and their investigations are continuing. I am working with ODCE on progressing this investigation. I will be unable to discuss the progress of my investigations with any shareholder or creditor.

"The former Taoiseach, Mr Albert Reynolds, was chairman of Bula at the time of the deal."

Bula shareholders will only receive a return on their capital if there is a sufficient surplus remaining after the expenses incurred in winding up the company are paid and all creditors are paid in full.

"Given that the company has 45,194 shareholders, it follows that any surplus must be significant to make it worthwhile to make any distribution to the shareholders," Mr Stafford says.

The company's audited accounts for 2001 show Bula had issued 2,238,375,553 ordinary shares.

"In the circumstances, I would suggest that shareholders seek professional advice as to whether they should write off their investment in the company, and whether they should utilise such a 'capital loss' against other capital gains."