Trading restrictions for Coughlan

An Ontario Securities Commission tribunal recently imposed a number of trading restrictions on Terence Coughlan, former Seabright Resources president. But the OSC has yet to resolve any of the allegations made against him and seven Seabright directors in a lawsuit launched by an affiliate of Australia-based Western Mining in July, 1988. Legal proceedings were initiated by Westminer Canada after it acquired Seabright and its Nova Scotia mines six months earlier.

While Coughlan denies a number of allegations made against him by OSC staff, he has agreed under a settlement approved by the tribunal to the restrictions for a period of 12 months and to contribute $40,000 toward the cost of the investigation.

He has also undertaken for three years to disclose to the OSC all of his activities involving any public company and the names of all officers and directors of the companies involved. In addition, he will disclose details of the settlement agreement to those officers and directors.

In a Nov. 29 notice of hearing, OSC alleged that Coughlan failed to fulfil timely disclosure requirements and material changes relating to reserve calculations at Seabright’s Beaver Dam gold mine in Nova Scotia.

As owner of the mine, Seabright was acquired in January, 1988, by Westminer as part of a $500-million swoop that also included the assets of four North American mining companies.

But when Westminer discovered that reserves and head grades at Seabright’s Forest Hill and Beaver Dam projects were not as high as public records had indicated, Westminer launched a $60-million lawsuit.

However, according to Peter Roy, the Australian company’s lawyer, it could be years before the allegations against Coughlan and the other directors are ever heard in court. Also to be resolved is whether the trial should be held in Halifax, N.S., or Toronto, Ont.

In a countersuit, the directors have accused Westminer of conspiring to deprive them of their alleged right to a $1-million liability insurance policy. But Roy says they are mistaken. “The insurance would not have applied because of what we alleged to be the conduct of the former directors,” he said.

Coughlan and the directors are also seeking to be compensated for any amounts they have to pay in connection with the Ontario litigation.

When contacted by The Northern Miner, Coughlan declined to comment on either the settlement or the lawsuit. He is currently acting as chairman of Alberta oil and gas company Cavalier Capital.