GATA plans trip to mobilize South Africa behind lawsuit

Section:

11:22a EDT Tuesday, December 12, 2000

Dear Friend of GATA and Gold:

News of our lawsuit against the suppression of
the price of gold is spreading around the world.
A few hours ago Reuters dispatched the story
below. You can help by bringing the lawsuit to
the attention of news organizations in your
area.

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

* * *

http://biz.yahoo.com/rf/001212/l12250234.html

Tuesday, December 12, 2000 8:50 am Eastern Time

BIS says U.S. gold scheme
suit "without merit"

By Nieck Ammerlaan

ZURICH, Dec. 12 (Reuters) -- The Swiss-based Bank
for International Settlements rejected as baseless
on Tuesday a U.S. lawsuit alleging the BIS conspired
with central banks and major international
investment houses to keep the price of gold low.

"The BIS is aware of the lawsuit filed against it in
Boston, Mass., and the BIS considers the lawsuit
without merit," said spokeswoman Margaret Critchlow
of the BIS, which is known as the central bank to
the world's central banks.

She said the BIS had no further comment on the suit,
filed by U.S. gold market analyst Reginald Howe with
the support of the Gold Anti-Trust Action Committee
(GATA).

As published on www.gata.org/latest.html, the suit
alleges the BIS, as a substantial owner of gold and
an active trader, schemed with central banks
including the U.S. Federal Reserve and investment
houses to depress the gold price, in part to prevent
losses on short positions of certain central banks.

The Swiss National Bank has commissioned the BIS as
an agent to help sell some 1,300 tonnes of gold, or
about half of Swiss gold reserves, under a plan for
coordinated gold sales agreed by 15 European central
banks last year.

The Dutch central bank has also sold excess gold via
the BIS, which itself holds 192 tonnes of gold,
according to its latest annual report.

Howe, who is a private BIS shareholder, also alleges
in the suit that the BIS proposes to pay its private
shareholders less than fair value in an announced
buyout offer.

He alleges the BIS ignored a report from J.P.
Morgan's French subsidiary valuing the share at
$19,099, instead offering only 16,000 Swiss franc
($9,373) per share.

Tying the two suits together, he notes the gold
price is a key factor in determining the price of
BIS shares, which are traded in Switzerland and
Paris.

The price of gold was quoted at 271.25 / 271.75 a
troy ounce at 1339 GMT.

It rose to a two-year high of 338.00 after the
Washington Accord on Sept. 26, 1999, which limited
European central bank disposals of the metal. The
price had hit a 20-year low fix of 252.80 hit two
months earlier on uncertainty about the disposals.

Swiss-quoted BIS shares were down 70 Swiss francs at
15,850 francs ($9,285) at 1220 GMT. The "Swiss
issue" set a year high of 15,940 on November 23,
having almost doubled in value in the wake of the
Sept. 11 news of the buyout offer.

So far this year, the stock has risen 77 percent.

The BIS says private shareholders no longer fit in
with its international role, adding there is little
liquidity in the shares.

The plan is to limit ownership of the BIS -- set up
in 1930 to handle German war reparation payments and
now focusing on promoting cooperation among central
banks and international financial institutions -- to
the central banks.

Forty-nine central banks now have 86.27 percent of
the issued shares and 100 percent of the voting
rights.

The planned purchase of the 72,000 privately held
shares, followed by the delisting of the stock, will
be voted on by an extraordinary general meeting on
Jan. 8.