News Release

Released: February 24, 1999 Contact: Michael Bernard
899-6500 or
(BC only) 1-800-373-6393

Vancouver -- The former president and chief executive officer of Arakis Energy Corp. has agreed to a 20-year trading ban and has paid a total of $1.2 million in fines and costs in a settlement reached with the British Columbia Securities Commission that related to numerous Securities Act violations.

James Terrence Alexander also agreed to a prohibition against acting as a director or officer of any issuer and from engaging in investor relations activities according to an Agreed Statement of Facts and Undertaking released by the commission today.

The Arakis investigation involved the tracking of share transactions through multiple accounts in several jurisdictions and took the commission’s staff the island of Jersey in the English Channel where "investigators spent several weeks working with the Jersey Financial Services Commission obtaining evidence and interviewing people," said Michael Watson, Executive Director of the B.C. Securities Commission.

"This should send a clear message to those who would abuse our capital markets that we are prepared to take whatever steps are necessary to deal with wrongdoers."

Alexander’s violations of the Securities Act included trading shares of Arakis while knowing of an undisclosed material change, failing to cause Arakis to file news releases and material change reports at critical times and failing to file insider trading reports. The reports included trading by various off-shore companies. Alexander also caused Arakis to violate the Company Act by, amongst other things, having Arakis issue shares before they had been fully paid for.

Arakis Energy Corp. was listed on the Vancouver Stock Exchange until August 1995 and traded on the NASDAQ stock market from June 1993. Arakis shares rose to $26 in July 1995 after then-chair Alexander announced Arakis had arranged $750 million US to finance its oil project in the Sudan, a deal that failed to materialize later.

At the stock’s peak, Arakis shares had a market value of approximately $1 billion US. In early 1998, Arakis settled its regulatory issues with the B.C. Securities Commission and paid a total of $250,000 in fines and costs.

While the stock price was high, early investors, including some off-shore companies made substantial trading profits. After the B.C. Securities Commission launched its investigation of the financing agreement, Arakis voluntarily delisted from the Vancouver exchange but continued to trade on NASDAQ in the United States. Trading in the stock was halted there shortly after. When it resumed trading a month later, the deal to develop the oil project with an arab group had collapsed and the stock fell to $6 a share.

The investigation revealed that Alexander had direction and control over shares of Arakis held at various times through Princely Limited, Hatfield Investments Limited and Chatel International Limited, which were wholly owned subsidiaries of a trust settled by Alexander and administered through Jersey. Alexander also had direction and control over the shares of Arakis held at various times by Anthem International Inc., a company incorporated in the British Virgin Islands.

Alexander admitted that Arakis failed to issue news releases and material change reports detailing his relationships with these companies or the fact that he had control over them. The statement also acknowledged that he caused Arakis to issue shares through private placements even though Arakis had not received full payment for them.

Alexander also admitted to several insider trading violations and acknowledged he failed to file insider reports disclosing his control or direction over shares in Arakis held by Archmont, Princely, Hatfield, and Anthem and his acquisition of shares of Arakis in repayment for a loan.

A copy of the Agreed Statement of Facts and Undertaking is available on the commission’s web site (www.bcsc.bc.ca) or by contacting Communications Manager Michael Bernard.

The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities and exchange contracts in the province.