Calandra predicts strong rally for gold mining stocks

By John Willman, Banking Editor
The Financial Times
December 17, 2000

Twelve central bankers have been threatened with legal
action by a Paris-based shareholders' group unless they
vote against terms offered by the Bank for
International Settlements to buy back the 13.73 percent
of its shares in private hands.

Deminor, a corporate governance consultancy that has
been at the centre of several battles to defend
shareholders' rights, says the SFr16,000 ($9,000) a
share offered by the BIS is too low. It is representing
some of the 6,000 institutional and individual
shareholders and says they are being bought out
compulsorily at a 53 per cent discount to the net asset
value of the shares.

The consultancy is putting extra pressure on three
central bank governors: Alan Greenspan, chairman of the
U.S. Federal Reserve; Jean-Claude Trichet of the Bank
of France; and Guy Quaden of the Belgian national bank.

They represent the three central banks whose shares
were sold on to private individuals because they did
not wish to subscribe for them when the BIS was created
in 1930. These shares were sold without voting rights,
which were retained by the central banks and can be
used at the BIS annual meeting on January 8, where the
buyback is due to be approved.

quot;If they cast their votes in favour, they are approving
a project in which they are the only beneficiaries
since they will repurchase the shares at a price below
their real value,quot; said Fabrice Remon, a Deminor
partner.

The BIS wants to buy back the shares because it says it
is difficult to reconcile shareholder value with the
bank's role in promoting global financial stability.
The shares, which are thinly traded on three stock
markets, are only partly paid and transfers require the
bank's approval.

The BIS is the world's oldest international financial
institution and was set up to distribute German war
reparations.