Canada?s Resolution Capital implicated in Busang fiasco

The Qu?bec District Council of the Investment Dealers Association (IDA) of Canada on Monday decided that its member Resolution Capital Inc. (formerly Montreal Bonds Inc.) and its CEO and president, Gaston English, had violated IDA by-laws and rules regarding the opening of accounts; supervision of accounts; execution of transactions; record keeping; and firm registration in Alberta and Indonesia.

IDA said investment accounts were inappropriately opened in the name of five Indonesian residents, including the late Michael de Guzman. At the request of

the late David Walsh, former President and CEO of Bre-X Minerals Inc. Accounts were also opened in the name of David Walsh sons Brett and Sean Walsh; a Walsh family foundation; Bre-X; and a related company Bresea Resources Inc.

All of these accounts held and traded shares of Bre-X and Bresea on the instructions of David Walsh. Association staff alleged that these accounts should not have been opened in the circumstances and that English and Resolution Capital Inc. failed to exercise due diligence in ensuring that the trading in these accounts was within the bounds of good business practice.

Association staff also alleged that, at the request of David Walsh, some of these transactions were not registered in the books and records of Resolution

Capital Inc. A hearing to determine the appropriate sanctions for English and

Resolution Capital has been scheduled in Montr?al, Qu?bec for May 6, 2003.

Bre-X is a tiny Calgary-based exploration company that created worldwide sensation through its claim to have discovered giant gold reserves in Busang, Kalimantan, which turned out to be a hoax. The company?s shares fell from high C$240 a piece to nothing in 1997.(alex)