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An open letter to Newmont: What are you doing for gold?

Section: Daily Dispatches

10p EDT Monday, November 6, 2000

Dear Friend of GATA and Gold:

The attempt of the Bank for International Settlements
to expropriate its private shareholders, perhaps to
prevent them from sharing in the bank's gold policy and
profits, made it into the Financial Times yesterday.

As you'll see from the story, reproduced below, this is
now an international issue, and we hope you'll remember
that you learned about it first from Reg Howe and GATA.
We're on the mark here and we have a plan to put gold's
enemies on the defensive by getting in the way of the
BIS scheme.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

BIS faces shareholder revolt

By John Willman in London
and Raphael Minder in Paris

The Financial Times
November, 5 2000

The Bank for International Settlements, the central
bankers' bank, is facing a revolt from its small
shareholders over plans to buy back the 13.73 percent
of its shares in private hands.

Deminor, a leading Paris-based corporate governance
consultancy, says it has been approached by
shareholders in France and Belgium who believe the
price of SFr16,000 ($6,110) a share is too low.

It is considering a legal challenge to the bank's plans
at the arbitration tribunal in The Hague, which is the
final appeal body for shareholders under the BIS's
founding statutes.

The Basle-based bank said in September it would buy out
its 6,000 private shareholders, at a cost of SFr1.15bn.

This would leave it wholly owned by 49 central banks,
which would be more appropriate for an organisation
that is now charged with promoting global financial

Deminor says the price offered is less than half the
net asset value of the shares in a bank with
substantial gold reserves. It also says the offer is 30
percent below the SFr23,320 price for shares issued in
March to four new central banking shareholders.

quot;This buyback forced on the private shareholders is
unacceptable,quot; said Fabrice Remon, a partner.

Deminor has been at the forefront of several battles
against moves to restrict shareholders' rights,
including those earlier this year proposed by Vivendi,
the media and utility group, and Suez Lyonnaise des
Eaux, another utilities group. It has offices in
Belgium, Luxembourg, and the Netherlands as well as
France and advises fund management groups on corporate
governance. The private shareholders, who have no
voting rights, own shares originally allocated to
central banks that did not wish to subscribe to them.
Almost half are in the U.S. issue, with a third from
France and a fifth from Belgium.

Mr. Remon said many of the shareholders had inherited
their stakes from their parents who saw them as a
substitute for investing in gold. Now they were being
effectively squeezed out with no right to attend or
vote at the annual meeting in January.

The valuation method used to reach the offer price was
devised by J.P. Morgan, the investment bank, and had
been based on the present value of future dividend
income. But Mr. Remon said the income had been held
back by the BIS, with dividends rising only 2.6 percent
over the last four years, while net profit at the bank
was up 70 percent.