Barry,
I just have a few small questions regarding your post which may help to
explain a great deal to those of us unclear as to the role of e-Gold, ltd.,
G&SR (dba Omnipay), and Ancien with regards to SRHL.
>
> 1. Because Douglas Jackson and I were instrumental in arranging an
> investment in Standard Reserve Holdings Limited, by Ancien Ltd.>> (snip)
, Douglas Jackson and I were appointed as outside directors of
> SRHL. >> (snip)
the Board has consisted of at least six
> members. Neither e-gold Ltd. nor Gold & Silver Reserve, Inc. invested in
> SRHL or any of SRHL's later established subsidiaries. In addition, SRHL
> and its subsidiaries are not shareholders of e-gold Ltd. or of Gold &
> Silver Reserve, Inc.
So, in essence, if I understand (correctly) your explanation...basically
you and Doug invested in Ancien, which in turn, invested in SRHL. This
means that although you and Doug are investors, Board Members, owners (not
sure of exact titles preferred) of e-Gold, Ltd, and G&SR, your investment
via Ancien kept e-Gold, Ltd. and G&SR out of SRHL, correct? Cool.
Excellent strategy!
Was Elwyn Jenkins then, on repeated occassions, when he stated that
"e-gold owns part of SR, and SR owns part of e-gold" (Conference in BVI's,
August 2001 and various other conversations) just deceiving the public
*since* as you described above e-Gold and G&SR did NOT own any part of SRHL
and vice-versa? OR did Elwyn also create a side company to invest in, which
in turn, invested in e-Gold or G&SR??
>
> 2. Douglas Jackson, at the time of his appointment to the SRHL Board,
> designed a governance structure for Standard Reserve based on the
> principle of separation of roles as a means of assuring fiduciary
> integrity.
So....was this just never utilized? If Doug designed it that
early...why wasn't it put into practice? Sounds like by the design of
Doug's governace structure "assuring fiduciary integrity" should/would have
prevented utilization of Client deposits for overhead/operating expenses.
Basically...safety precautions were designed...but not implemented. Reminds
me of motorcycle riders who have helmets strapped to their bikes but don't
wear them. (Motorcycle = "Donor"-cycle! # 1 source for organ donation is
motorcylce accidents!)
(I could be wrong on my interpretation of your statement. Please correct
me if I am.)
>
> 3. Pursuant to this governance structure, the Board of SRHL approved the
> establishment of Standard Transactions Limited and Standard Reserve Issue
> Ltd. and the establishment of a special purpose trust to hold title to the
> assets backing customer accounts. The Board also approved the appointment
> of, and compensation of, Barry Downey as CEO of Standard Reserve Issue
> Ltd., >>>>
I think this means that Doug designed the goverance structure, the
Board approved its use and your position and compensation...but simply never
implemented the governance structure nor employed you to actually be the
CEO?
> Contrary to public statements made by Dr. Jenkins on the Standard
> Transactions web site and in conferences (which statements were first
> brought to my attention on June 10, 2002), the trust was never
> established, my appointment as CEO never became effective and no
> compensation has ever been paid to me, or to any other entity, by Standard
> Reserve Issue, Ltd. or by any related company.
I think this answers my above questions in that
1. You were unaware that Elwyn Jenkins was publicly stating for nearly
one year BEFORE you heard about him publicy stating you were already heading
up the Trust.
2. Strange that no one would tell you about what Elwyn was publicly
stating about your role with SR, especially since you were on the Board of
SRHL.
Was it ever brought to your attention the information on the SRHL
website stating you were the CEO of the Trust?
>
> 4. As Director of SRHL, during the period July to September 2001, I
> assisted in preparing a trust instrument that would insulate the reserves
> backing S-AUG and S-USD from any financial risk relating to exchange
> activities. >>> Until that separation, Standard
> Transactions Limited continued to perform all of these activities.
Sounds like they must have taken a great deal of care to make sure you
were not aware of Elwyn's claims about you already having taken the job if
you were that involved and meeting with that many people but still never
informed that Elwyn was saying you were already heading the Trust.
This is why, in my opinion, so many felt safe putting funds into SR's
system. You know...backed 100% by e-gold, you heading up the Trust
(according to EJ) the insurance from Lloyds (which also proved false), etc.
the massive number of Subsidary companies to prevent financial or litigation
contamination of the entire system.
>
> 5. The management of Standard Transactions Ltd. repeatedly made
> representations to me and to Douglas Jackson that a functionally
> equivalent separation of asset accounts was in effect at Standard
> Transactions Ltd., pending formation of the Trust and the transfer of
> fiduciary roles to Standard Reserve Issue Ltd.
I guess this is what is so confusing. If they assurred you about their
accounting practices...was an audit never completed or any Due Diligence
into their accounting practices completed? This makes it sound like they
simply told you that they "were doing it right" and therefore...no one
bothered to check the facts.
According to
> representations made by Dr. Jenkins to Douglas Jackson and myself, the
> declaration of trust was delayed by complex negotiations to engage a
> trustee institution. To date, the trust has never been declared or put
> into effect and no assets were ever turned over to Standard Reserve Issue
> Ltd.
Cool! Documentation with dates, names, and specifics will be available
for the court case!!
>
> 6. Despite assurances to Douglas Jackson and myself, (1) that particular
> care had been taken by Standard Transactions Ltd. to avoid commingling of
> operating and customer funds pending implementation of governance model
> and (2) that an audit of the operations was being conducted by an outside
> auditor, it is clear that Dr. Jenkins, the since-removed Chairman of SRHL,
> misrepresented the true state of affairs to the outside Directors,
> customers, business partners and regulators in the BVI.
Ahhh..so Elwyn "claimed" an audit was being conducted. I wonder if
anyone called that third party or checked with them to find out how the
audit was going. I also wonder when the audit was suppossed to be taking
place: 1. before all of the negotiations and investment from Ancien 2.
during that period or 3. afterwards. Strange....but it sounds like # 3. I
have to admit..EJ's is a great salesman!
>
> 7. On May 28, 2002, Douglas Jackson and I heard for the first time, that
> the representations that had been made to us by the management of SRHL
> were not true.
So, after negotiating a Trust and meeting with the necessary parties
from July to September of 2001, no one checked the accounting until the
money ran out in May? Strange that so much negotiation could go on for a
Trust without an audit having been completed so as to give the parties
involved an exact number as to how much that Trust would be responsible for.
Then again, possibly this information is not necessary to open or set up a
Trust. (I have never set one up so I am guessing it owuld be important to
know the amount of AUG SR had to put into the Trust being negotiated)
On that same day, I sent an e-mail on our behalf demanding
> an immediate investigation, the immediate cessation of the commingling
> activities, and a Board meeting to discuss these issues. That e-mail, a
> small portion of which was sent to the e-gold discussion list this week,
> also informed management of SRHL that Douglas Jackson and I were beginning
> our investigation by meeting with Dr. Jenkins and Glenda Jenkins in
> Atlanta, and that we might resign from all positions, formal and nominal,
> depending on the outcome of our investigation.
>
But it sounds like the co-mingling went on for most of last year and
all of this year. I guess I just don't understand why suddenly someone has
the authority to demand the "immediate cessation of the commingling
activites" but did not have the authority(?) or reason(?) to demand it be
halted as soon as the commingling began? According to the documents on the
SR website, it is believed this began as early as March of 2001...even
before the Trust was negotiated.
> 8. This week, Ancien Ltd. is filing a petition for liquidation of SRHL in
> BVI and is paying the initial costs of filing this petition. To do this,
> Ancien Ltd., which had a secured debt with SRHL, waived its security
> interest and converted the debt to unsecured status. This places Ancien
> Ltd. in the same, or lower, position as all other creditors and depositors
> of SRHL. Therefore, contrary to recent statements by individuals
> questioning Ancien's motives in filing this petition, by taking these
> actions, Ancien is less likely to recover any of this debt than it was
> before taking these actions. Also, by paying the initial costs of this
> filing, Ancien has made it easier for all other creditors and depositors
> to file their claim with the BVI court. As soon as the petition has been
> filed, Ancien intends to post a notice of how to file a claim with the BVI
> court.
>
Most excellent! This is very noble. Since the public was led to
believe, by Elwyn Jenkins's public statements and postings on the SRHL and
ST websites, that the Trust WAS in place, insurance WAS close to being in
place, and that you were heading up the Trust (even though we know now that
was a premature announcement on EJ's part) they had complete faith in the SR
system. That faith allowed them to send their funds to SRHL for deposit to
their SR accounts. That faith also led them to loose all of their monies.
It would seem simply wrong for Board Members and Investors to be
compensated before the account holders since investing in a company, and
working for a company, both have understood risk. The clients *understood*
that their funds were safe in SR for a number of reasons (backed by e-gold,
Trust, B.D. as CEO of Trust, etc.) but were basically robbed blind by the
commingling.
I have no holdings in SR so the situation does not *directly* affect me.
However, the end result will affect ALL members of the Gold Economy as this
will likely set the precedence for what would happen if e-gold, e-Bullion,
Crowne Gold, or Gold Money went under. Paying investors or Board Members
BEFORE the customers who had deposits in the system would, to many people,
mean that the Trusts and other safe guards in effect with the other Issuers
were...worthless. Regardless of SR's *advertised* safeguards...the end
result is the people with funds in the system may not receive a penny.
I wish you and all other people affected by SR's commingling practices
the best of luck in recovering your losses and applaud your "standing in the
back of the line" approach to your specific value recoupment. Perhaps
liquidation of all SRH:'s assets will be enough to cover the customer
deposits and all other liabilities, eh?
Or...maybe they could just sell a few of the upscale condos Elwyn has in
Buckhead, Atlanta or Canada to cover the losses created by his unethical
business practices. Maybe put him on pots-n-pans detail and let him work it
off! *smile*
The saga continues....
Eric
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