News Release

Released: April 29, 1992  Contact: Ron Messent  660-4800

The British Columbia Securities Commission today released its decision in the matter of Rainforest Mushrooms Ltd, G. Gerry Hargitai and John Czinege.

The Commission ordered the removal of Hargitai's trading rights and prohibited him from becoming or acting as a director or officer of a reporting issuer, or of an issuer that provides services to reporting issuers, for a period of 25 years. Czinege was prohibited from becoming or acting as a director for 15 years. Hargitai and Czinege were also ordered to pay the costs of the hearing.

The Commission also extended a temporary cease trading order against Rainforest shares and freeze orders against Rainforest's property and against the contents of Hargitai's safe deposit box.

Hargitai was president and a director of Rainforest, a reporting issuer listed on the Vancouver Stock Exchange. Czinege was also a director of Rainforest.

Rainforest completed an initial public offering of its shares in September 1989. The prospectus disclosed that the proceeds of the offering would be used to develop a mushroom business in British Columbia. In January 1990, Rainforest announced that it had entered negotiations to acquire a mushroom business in Hungary and had advanced $221,500 of the $350,000 proceeds of the public offering toward the project.

A hearing was held in February 1991 into the affairs of Rainforest and the conduct of Hargitai and Czinege. On the basis of the evidence and arguments presented at the hearing, the Commission found that:

- The $221,500 that Rainforest had purportedly advanced to Hungary had in fact been fraudulently misappropriated by Hargitai.

- Hargitai had used at least $184,000 of this money to purchase 42 per cent of the shares from the public offering, and thereby created a misleading appearance of trading activity in Rainforest shares.

- Representations in Rainforest's disclosure documents concerning the purported negotiations and advances in Hungary were false and misleading.

- In April 1990, Rainforest falsely represented to Commission staff that the money represented to have been in Hungary had been returned to Vancouver.

The Commission said the conduct of Hargitai and Czinege as directors of Rainforest is the type of conduct that damages public confidence in the capital markets.

Hargitai was the president of Rainforest and, in effect, its chief executive officer. The Commission found that Hargitai had acted with a complete disregard for regulatory requirements and had acted dishonestly, in bad faith and not in the best interests of Rainforest.

The Commission said that, in failing to meet the standards required of a director, Czinege had assisted Hargitai to perpetrate his fraudulent activities. It found that Czinege had acted in bad faith and not in the best interests of Rainforest and that he appeared to exercise none of the care, diligence or skill required of a director.

Copies of the Commission's decision (26 pages) may be obtained in person at 1100 - 865 Hornby St., Vancouver.