Trial of former Bre-X geologist on hold until 2005 and could last full year

Thursday, March 18, 2004

The long-delayed trial of former Bre-X Minerals Ltd geologist and Cayman resident, John Felderhof, who faces securities charges in the wake of the company's Cdn$6 billion collapse in 1997 after its Indonesian gold site was exposed as a fraud, will not resume until some time next year and could take a year to finish, a Canadian court was told this week.

According to the Toronto Globe & Mail, the trial began in the fall of 2000 but has been on hold since April, 2001, when the Ontario Securities Commission attempted to replace the judge. Last December, Ontario's Court of Appeal threw out the OSC's attempt to get a new judge and have the trial begin anew. The OSC did not appeal the ruling.

During a brief appearance in Ontario Court on Monday, lawyers for both sides agreed to return on 30 March to set a 2005 trial date.

Joseph Groia, Mr Felderhof's lawyer, told reporters he expects the trial to last a year. When the trial was interrupted three years ago, OSC lawyers were only one-quarter of the way through their case after 70 hearing days, he said. 

Based on that, he said he expects to spend another 190 days in court, over a year, defending Mr Felderhof.

"One of the things we'll have to assess, and we've already started this, is what kind of prejudice Mr Felderhof might have suffered," Mr. Groia said. 

He acknowledged that one possibility he will consider is asking a judge to dismiss the case because of the delays. However, he added, "it's too early for us to make a decision about that."

Frank Marrocco, a Toronto lawyer recently retained to replace OSC lawyer Jay Naster as Crown Counsel on the case, told reporters that a year-long trial strikes him as "a rather long time but it remains to be seen." 

The trial will take place before Judge Peter Hryn, the same judge the OSC attempted to get thrown off the case.

The OSC attempted to oust Judge Hryn, partly on grounds that he allegedly showed bias against the OSC by failing to halt Mr Groia's verbal assaults on Mr Naster. The appeal court judges disagreed, saying the transcript of the trial does not support that view.

Mr Felderhof, a Canadian who lives in the Cayman Islands, is accused of selling Cdn$84 million worth of Bre-X shares in 1996 while in possession of material insider information. He has pleaded not guilty to the insider trading charges levelled against him in 1999.

Bre-X once claimed to have found the world's largest gold deposit in Indonesia, but the discovery was revealed as a hoax in 1997. 

The company's shares became worthless and investors lost an estimated Cdn$6 billion, ranking Bre-X as the biggest mining stock swindle in Canadian history.

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