The bombings of a pharmaceutical company in 1997 were linked to huge losses by a pair of amateur stock investors in the Bre-X Minerals Ltd. stock fraud, a Crown prosecutor said yesterday.
Crown prosecutor Jacques Dagenais said the bombings at BioChem Pharma Inc., discoverers of the AIDS drug 3TC, were an attempt to drive down the Laval, Que.-based company's stock price.
He was making his opening address to a Quebec Superior Court jury in the trial of Steven Thresh and Carole Perron, who face charges in connection with the alleged botched bombing scheme at two BioChem installations around Montreal in November, 1997.
Mr. Thresh, 25, and Ms. Perron, 30, are both charged with trying to influence the value of BioChem Pharma stock. Mr. Thresh is charged with planting and setting explosives at the company's offices.
Mr. Dagenais traced the alleged scheme's genesis to a soured stock market transaction months earlier.
He told the jury that Mr. Thresh and Ms. Perron had invested $250,000 to $300,000 in Bre-X, the Calgary mining company whose gold discoveries were revealed to be a fraud. Trading in Bre-X was halted and the stock was virtually worthless when it resumed. Much of the pair's investment was purchased on credit, leaving them indebted.
The couple decided to try to turn the same strategy to their advantage, Mr. Dagenais argued. "They tried to recreate it, in their favour," he told the court.
In the months leading to the bombings, the pair bought thousands of dollars worth of shares in BioChem stock. The bombing at the company's headquarters in Laval and a related facility in Montreal were designed to sink the company's stock price, he alleged.
The pair bought so-called "put options" on 119,000 shares of BioChem worth $110,000. Put options let their holders sell stock at a given price on a predetermined date in the future. If the stock price falls before then, the "put holders" make a profit by buying shares at the current market price, but selling them at the higher, preset rate.
Some of the couple's transactions took place through the account of a man named Peter Svoronos, acting on behalf of Mr. Thresh, the jury was told.
But the couple's bid to make a windfall profit on a drop in the share price was foiled when stock exchanges halted BioChem's trading as soon as the blast attacks took place, Mr. Dagenais said.
He described the entire bomb-planting scheme as an amateurish operation. Three bombs were detonated at BioChem's headquarters in Laval and a related building in Montreal's north end. Another device was uncovered the following March.
Another unexploded bomb was discovered after police were tipped off by Réal Bastien, a key Crown witness in the couple's trial.
Testifying late in the day, Mr. Bastien told the court that around the time of the bombing, he was living in an east-end Montreal room and could be contacted only by a pager, since he had no telephone.
The trial before Mr. Justice Jean-Guy Boilard is expected to last a month.
- Report on Business Company Snapshot is available for:
- BIOCHEM PHARMA INC.