The long-awaited resumption of former Bre-X geologist John Felderhof’s trial will likely take place December 6, but it will take at least another year to complete hearings in the case involving a gold mining fraud that cost investors billions of dollars in 1997.
Justice Peter Hryn of Ontario Superior Court approved a tentative schedule last week, providing for two weeks of December hearings. Felderhof has pleaded not guilty to eight charges of insider trading and misleading investors.
After a break next January and most of February, the trial will resume February 28 and run through to May 20, 2005 – more than four years after the trial first hit the courts and eight years after Bre-X shares collapsed as a gold deposit dubbed the world’s largest was exposed as a hoax. It has been estimated that investors lost $3 billion.
The new dates will be confirmed in court on May 17.
Various civil suits in Canada and the United States are still pending.
But Felderhof has been living outside the country since 2000 and it seems unlikely he will appear at his own trial.
The trial has been delayed since April 2001, when the Ontario Securities Commission tried to remove the trial judge, claiming that Hryn had shown bias against the prosecution. The Ontario Court of Appeal ruled against the OSC.
Felderhof is accused of selling $84 million worth of Bre-X stock in 1996 while having information not disclosed to investors about the purported Busang gold deposit on the Indonesian island of Borneo. Felderhof faces a maximum two-year prison term and $150-million fine if convicted.
Later investigations showed that core drillings had been “salted’’ with gold as part of the fraud.
Despite the lengthy delays, lawyer Frank Marrocco, representing the OSC, said the commission remains committed to having the trial proceed, telling Hryn that he hopes to see “some serious in-roads into the case’’ this December.
“This case is a very significant one in terms of the size, but I don’t think it’s unusual to have to take a long time to present it,’’ Marrocco said outside the court.
Marrocco expects the prosecution will call about 20 witnesses to testify. But it seems unlikely that Felderhof – the last surviving major figure in the Bre-X scandal – will appear to face the charges.
Felderhof had been living in the Cayman Islands – where there is no extradition treaty with Canada – though recent reports suggest he has moved elsewhere in Central America, or to Indonesia.
Felderhof has left it up to his lawyer, Joseph Groia, to represent him in court. Groia was not available for comment after the court appearance to set new trial dates.
The fact that a trial for Felderhof has still not been completed nearly seven years after the scandal first broke offers little comfort to investors, said John Bart, president of the Canadian ShareOwners Association.
“The investor in the street will look at this and be very skeptical,’’ Bart said of the trial process. “I’m not saying that the guy’s guilty. But you’ve got to deal with this quickly . . . so that if he is guilty, justice can be swift. It’s just unfortunate that it’s dragged on like this.’’
