Grenville Gold's chairman sues Bullboard posters
2008-01-02 16:24 ET - Street Wire
by Stockwatch Business Reporter
The chairman of Grenville Gold Corp. is suing three anonymous posters to an Internet bulletin board for defaming him. In a lawsuit filed in B.C. Supreme Court on Dec. 4, 2007, Leonard DeMelt claims that the posters, with the pseudonyms dedere, serod and birdy1, wrote a series of defamatory postings about him on a Stockhouse Bullboard starting on Jan. 19, 2007. In the postings, the defendants accuse Mr. DeMelt of insider trading, high closing, lying and incompetence, among other things.
The first poster, dedere, wrote over 40 posts between Jan. 19, 2007, and Oct. 16, 2007, according to the lawsuit. Throughout his work, there is a theme of scepticism about the company and about Mr. DeMelt's fitness for his job as chairman. He harps on three main issues. He claims that Rakesh Dhir owns a large position in the company, a fact which he says the company should disclose but has not. He accuses Mr. DeMelt of high closing. He also berates Mr. DeMelt for not having an NI 43-101 report for Grenville's properties in Peru.
For example, on Jan. 21, 2007, he wrote: "When someone not listed as an insider or control person owns ten million shares of an issue, directly or indirectly it is the responsibility of the management to see that this fact is disclosed to the public, which in the case of Rakesh Dhir, Anita Dhir and Dhir Enterprizes has not been done with respect to their holdings in GVG. Other members of the De Melt family are also large shareholders, which would normally require insider reporting limitations."
On March 21, he wrote, "GVG promoters have issued themselves and their close friends approximately 15M..that's fifteen million shares and warrants and options at an average price of ten and twenty cents per shares while promoting the company to the public at prices as high as .76 cents per share before even one of their acquisitions has been formally approved NI-43-101 by the TSX."
On April 4, dedere wrote several posts. In one, he said: "It would be difficult to find anyone more inept than DeMelt when it comes to getting the paperwork done. he just doesn't get it. he is impulsive, sloppy and careless. consequently i would bet that HRR has it right." In separate post from the same day, he said: "High saling is a contravention of TSX regulation and policy. Don't do it again. It is pointless as well as dangerous, and another example of the impulsive, careless and sloppy management of this company's affairs."
Mr. DeMelt complains only about one post by the second defendant, serod. This poster does not mention Mr. DeMelt. Instead, he accuses Grenville Gold of being a scam, and raises two concerns. The first is that "Grenville doesn't have any 'mine' to speak of in the Silveria project area." The second is that the company, despite its claims, is not in the process of listing on the stock exchange in Lima.
The third defendant, birdy1, is not as prolific as dedere, but he makes many of the same accusations. Like dedere, he connects Mr. Dhir to several million shares of the company. Like dedere, he writes that Mr. DeMelt is incompetent. On Sept. 13, 2007, he wrote: "These are all 'dirt farms' as far as i can tell. in other words, all the properties are all worthless junk. the only thing that matters is can the promoters arrange a blowoff of their cheap stock?" In the same post, he added, "The delays caused by len demelt and his incompetence have basically run out the clock."
Birdy1 makes other accusations. He calls someone in management, presumably Mr. DeMelt, a "half breed metis cave dweller." He says the police are investigating this cave dweller for stalking a former business associate, that the BCSC is investigating the cave dweller for "activities while defacto control person for Andresmin" and that the cave dweller made "property transactions which contravene securities regulations."
He says that a Toronto broker informed him that Mr. DeMelt had a temper tantrum during a meeting with the broker's firm and "embarrassed everyone in the room." Supposedly, the Toronto people at the brokerage told the Vancouver people to not bring Mr. DeMelt to them again.
Finally, on Nov. 29, birdy1 wrote: "These management people will never have anything to do with any future production on this or any other projects to do with Grenville Gold Corp. Obviously Len and crew chose such a project to allow them to unload their shares on an unsuspecting public."
Mr. DeMelt claims that the postings defame him because they either say or mean that he is a liar, a fraudster, incompetent and untrustworthy. The postings also say he has not reported insider trading and has disobeyed securities regulations. Adding to the libel, all of the above is allegedly well known in the investment and mining communities.
He adds that he will submit evidence at trial about the entire content of the postings "as illustrative of important context in support of the Defamatory Meanings."
Oddly, Mr. DeMelt only claims damages from dedere and birdy1, not serod, and wants an injunction preventing those two from making any more defamatory statements.
Michael Bromm of Lang Michener LLP represents Mr. DeMelt. None of the allegations have been proven in court.