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Revealed: $20m gold heist

AUSTRALIA'S biggest gold refiner is embroiled in an extraordinary scandal, with $20 million worth of gold missing, a former key executive facing charges over a $210 million fraud, bank accounts frozen and warnings of further problems.

At the centre of the scandal is a US subsidiary of Perth-based Golden West Refining Corp. The company warned the Australian Stock Exchange in February it expected heavy losses from the subsidiary, Handy & Harman Refining Group, but gave few details.

Golden West managing director Michael Ryan revealed yesterday $20 million worth of gold bought by the US subsidiary in Peru has been missing since some time after September last year.

The loss will plunge Golden West into the red this financial year.

Mr Ryan confirmed that most senior staff from HHRG, which Golden West bought in 1996, have resigned or been sacked. And the subsidiary's bank accounts in the US have been frozen.

An investigation by the London office of KPMG has uncovered other losses within the US operation that will require further substantial write-downs, he said.

And in a separate development, two former HHRG executives and a consultant have been indicted by the US Department of Justice in relation to an alleged $US130 million ($214 million) fraud against the Argentinian government.

One of the men, Barry Wayne  who was president and CEO of HHRG  was responsible for buying the Peruvian gold that is missing.

Golden West is Australia's biggest refiner, accounting for 10 per cent of the West's gold and silver refining.

Its Perth refinery is run in partnership with the Western Australian Mint. It has other refineries in Papua New Guinea, Canada and the US.

Mr Ryan said his company first became concerned in late January about transactions involving the US subsidiary. Of particular concern was $US12.5 million worth of gold that had been bought by HHRG from a long-standing supplier in Peru.

The gold  which was meant to be in the custody of an "internationally recognised" secure carrier in Peru  had been confirmed at the time of its purchase.

Its presence in stock was confirmed again by an inspection agency last September.

Some time after this the gold was returned to the seller without Golden West's knowledge.

Golden West began an investigation in January. On February 18, Mr Wayne resigned  three days before Golden West's inquiries confirmed the gold was missing.

Since then most of the senior management who served under Mr Wayne have resigned or been dismissed.

Australian chartered accountant Tony Pearce has taken over running HHRG.

The London office of KPMG, which investigated all HHRG operations, has warned of other losses within the subsidiary, Mr Ryan said.

And all of HHRG's bank accounts have been frozen.

Claims have been lodged with insurance companies to cover the loss of the gold.

On March 7, Mr Wayne and two others  former executive Richard Searle and consultant Michael Verleysen  were indicted in the US in connection with alleged activities involving US-listed Handy & Harman between 1992 and 1996.

(HHRG was then Handy & Harman's precious metals refining division.)

The indictments relate to an alleged scheme to defraud the Argentinian government. This allegedly involved a conspiracy to ship precious and non-precious metals out of Argentina at inflated prices and then claim export incentives from the government.

Golden West is 50.1 per cent-owned by NM Rothschild. Mr Ryan said the Perth refinery was not affected by the developments at HHRG.


No Comment....:o)

Regards from Down Under

-- Pieter (, March 26, 2000

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