It was surely one of the clumsiest attempts ever to rewrite history. In 1996, Calgary-based Bre-X Minerals Ltd. spent months assuring investors it owned most of Busang, a mammoth gold deposit in Indonesia.
But the following February, CEO David Walsh flipped the script. “Some have mistakenly thought that we somehow owned 90 per cent of this property,” Walsh said at the time. “This was never the practical reality, nor was it ever a basis for the valuation of Bre-X stock.
” Hogwash. Bre-X’s previous assertions that it owned 90 per cent of the bonanza were exactly what juiced its stock. And when The Globe and Mail reported five months earlier that Bre-X had lost its grip on Busang, Walsh repeatedly denied the story, doubling down on his majority-stake narrative.
It wasn’t until the Indonesian government forced Bre-X into a development deal that left the miner with a 45-per-cent stake that Walsh contradicted himself. But ownership issues were just the tip of Bre-X’s $6-billion fraud. Business journalism is often derided as boring – or worse, sycophantic.
But an independent financial press is fundamental to the efficient functioning of free markets. Reporters are an important check on corporations, analysts and regulators by ensuring a free flow of information that enables ordinary people to make informed investing decisions. The role of the press in exposing corporate malfeasance is particularly vital in Canada, where constitutional divisions of power have prevented.
