8:59p ET Monday, February 5, 2001 Dear Friend of GATA and Gold: Thanks to GATA member J.M. for calling my attention to the following Reuters story today about one of the lawsuits against the Bank for International Settlements. GATA and Reg Howe aren't the only ones to think that something is wrong here. Some very big people do too. An hour ago I spoke with GATA Chairman Bill Murphy, who is in Cape Town, South Africa, continuing his meetings with gold industry people on the eve of the Indaba 2001 Africa mining conference. Howe arrived there over the weekend, and GATA continues to receive great publicity and support. We're sure to have more on that later in the week. CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. * * * U.S. lawsuit seeks higher price for BIS shareholders By Cal Mankowski NEW YORK, Feb 5 (Reuters) -- A U.S. mutual fund group is joining in an international legal fray over the terms of a compulsory buyout of shareholders in the Bank for International Settlements. Basel, Switzerland-based BIS, often described as the bank for the world's central banks, voted on Jan. 8 to buy back all the shares that had been in public hands since the 1930s, representing about 13.73 percent of the total capital. First Eagle SoGen Inc., which holds 9,085 BIS shares, claims shareholders have been subjected to a "squeeze-out'' at a price that is unfairly low and is turning to the courts to try to force a higher price.The shares were valued at $90 million based on the price, set by the BIS, of 16,000 Swiss francs per share. But New York-based First Eagle, with 130,000 investors in three funds that own the shares, says they may be worth twice that amount and has not surrendered its shares.First Eagle's stake represents about 12.5 percent of the total public shares of BIS, which together are worth about $700 million using the price of 16,000 Swiss francs. "We have not surrendered our shares and we are urging every other shareholder in the world not to surrender their shares,'' Charles de Vaulx, co-manager of the First Eagle SoGen Funds, said in an interview. The BIS, which is owned mostly by central banks, says the public shares were canceled last month and the BIS refers in court papers to its adversaries as "former" shareholders. "The transaction was completed Jan. 8," said a source familiar with the BIS position who requested anonymity. "What is left to be done is simply to pay people the amount of money to which they are entitled.'' But First Eagle alleges BIS has not made required disclosures under U.S. securities laws and is fighting back. A U.S. District Court judge in New York last month denied First Eagle's request for a temporary restraining order, observing that the BIS shares are "quite unusual" and the rights of shareholders are "severely limited." First Eagle has appealed the ruling and a hearing before the U.S. Court of Appeals for the Second Circuit in New York is scheduled for early March. The appeals court recently denied a request for an injunction pending the appeal. The terms of the buyout also are being fought in Europe, where Deminor, a French corporate governance consultancy firm, last month said it had started court action against BIS advisers J.P. Morgan and auditors Arthur Andersen. The 16,000 Swiss francs price was based on a J.P. Morgan evaluation reviewed and approved by the Andersen firm.Deminor said it was taking the U.S. investment bank and the audit firm to court in Paris in a bid to get the terms of the controversial buyback reassessed independently. Unlike European lawsuits, however, the First Eagle suit names the BIS as a defendant. First Eagle also takes issue with an arbitration procedure that the BIS says is available." What the bank is saying is that you have to go to an arbitration panel tribunal where all five members of the tribunal are chosen by the national governments of the central banks,'' said a source familiar with the First Eagle case. De Vaulx said First Eagle would welcome an appraiser it considers to be neutral. The 9,085 BIS shares in question are held in various amounts in the First Eagle SoGen Global Fund, the First Eagle SoGen Overseas Fund, and the First Eagle SoGen Gold Fund. The investment firm said it has been buying the BIS stock for the funds since the mid-1980's and shows a compounded annual return on the investment of about 15 percent, including the buyout price and the dividends paid over the years. The shares represent about 4 percent of the Global Fund, 6 percent for the Overseas Fund, and 7 percent for the Gold Fund. The 16,000 Swiss francs price for each share determined by BIS is equivalent to about $9,773 per share based on Monday's exchange rate. The First Eagle SoGen Funds have been part of New York investment managers Arnhold and S. Bleichroeder Advisers Inc. since January 2000. -END- ------------------------ Yahoo! Groups Sponsor ---------------------~-~> <FONT COLOR="#000099">eGroups is now Yahoo! Groups Click here for more details </FONT><A HREF="http://click.egroups.com/1/11231/0/_/126/_/981424941/"><B>Click Here!</B></A> ---------------------------------------------------------------------_->