News Release

Released: December 23, 1996  Contact: Barbara Barry  660-4800 or (BC only) 1-800-373-6393

The British Columbia Securities Commission has set January 15, 1997, as the effective date of an order requiring Harbanse S. Doman to resign as a director and officer of Doman Industries Ltd. An order prohibiting him from trading in securities for 10 years took effect December 20, 1996, and an order prohibiting him from being a director or officer of reporting issuers other than Doman Industries for 10 years has been in effect since August 28, 1996.

The decision follows a judgment of the Court of Appeal for British Columbia issued on December 20, 1996. The judgment granted Doman, Doman Industries and Russell J. Bennett leave to appeal, on limited grounds, a Securities Commission decision of August 28, 1996. However, the Court refused to stay the Commission decision, which prohibits Doman, Russell Bennett and William R. Bennett from trading securities and from being a director or officer of a public company and requires them to pay costs of the Commission hearing.

The August 28 orders were imposed on the Bennetts for insider trading in the shares of Doman Industries Ltd and on Doman for tipping the Bennetts about a take over bid for Doman Industries and the subsequent withdrawal of the bid by Louisiana Pacific Inc. of Portland, Oregon. The order against Doman permits him to return as a director or officer of Doman Industries after one year, provided certain conditions related to the corporate governance of Doman Industries are met.

Following the Commission decision, Doman and Russell Bennett sought leave to appeal, citing several grounds, including unreasonable findings, procedural unfairness, violation of the charter of rights, bias and delay. The Court rejected most of the grounds but granted leave to appeal on the question of whether certain findings that Doman tipped the Bennetts before they purchased Doman Industries shares went beyond what was specifically alleged in the notice of hearing. The Court held that Commission's finding that Doman tipped the Bennetts before they sold their shares on November 4, 1988, was the only reasonable conclusion on the evidence.

At the same time, Doman Industries applied for and was granted leave to appeal on the question of whether the Commission has jurisdiction to impose requirements on Doman Industries as a condition for Doman's return as a director or officer after one year.

The orders imposed by the Commission were originally effective August 28, 1996, except for the order requiring Doman to resign from Doman Industries, which was effective September 30, 1996. On September 30, the Court of Appeal stayed the orders prohibiting Doman from trading and requiring him to resign from Doman Industries pending the application for leave to appeal. That stay expired on December 20, 1996, with the release of the Court's judgment on the leave application.

On application by Doman, the Commission has varied the original decision to make January 15, 1997, the effective date of the order requiring Doman to resign from Doman Industries.

The British Columbia Securities Commission is a provincial government agency responsible for regulating trading in securities and exchange contracts.