Shareholders in Bula Resources meet in Dublin this morning for what is likely to be an angry annual meeting, following the publication of a report which finds that former chairman, Mr Jim Stanley (59) was the beneficial owner of a company to which Bula gave £2.5 million worth of shares in exchange for a stake in a thus far unproductive Russian oilfield.

The report, by the Government-appointed inspector, Mr Lyndon MacCann, is to be sent to the Director of Public Prosecutions, the Tanaiste, Ms Harney, said last night. In a move likely to further fuel shareholder anger, Ms Harney is strongly critical of the way Bula was managed and controlled, saying that "satisfactory oversight of Mr Stanley's activities was clearly absent". She has asked the current directors what action will be taken to restore confidence and has also referred the matter to the Irish Stock Exchange for its comments.

A spokesman for the company said there would be no comment until the board had time to consider Mr MacCann's report.

Mr MacCann was appointed by Ms Harney in October last to inquire into the ownership of 101 million Bula shares transferred to a British Virgin Islands company, Mir Oil Development Ltd, as part of a disastrous oil deal set up by Mr Stanley in 1995 and involving a Russian oil field, which has cost the company £12.3 million.

In the key finding of his report, received by Ms Harney yesterday and published last night, Mr MacCann concluded that Mir Oil was at all times owned by Mr Stanley. Mr Stanley had told the Bula board that the company was owned by a South African businessman, Mr Charles Lloys Ellis.

In his report, Mr MacCann said Mr Stanley was at all times "deliberately making statements which he knew to be untrue" when he was claiming Mir Oil was owned by Mr Lloys Ellis.

Mr Stanley told the Russian partners to the deal, a company called KMNGG, that Mir Oil was a part of the Bula group of companies.

Mr MacCann also found that Mr Stanley and his son, Mr Brendan Stanley, had during the months following the incorporation of Mir Oil, acted in an executive capacity as officers of the company.

During the course of Mr MacCann's investigations, he twice travelled to Moscow to meet Mr Stanley, but on both occasions Mr Stanley failed to turn up for interview. Mr Stanley now lives in Russia and has used money he received from the sale of Bula shares for business deals involving mining for emeralds in Russia.

Of the 101 million shares transferred to Mir Oil in September 1995, 27.8 million were sold for approximately £700,000 in late 1996 and early 1997. This money was then used by Mr Stanley for various purposes.

Dealing in the other shares was frozen as a result of a High Court order sought by Bula Resources in September 1997, pending clarification as to the identity of the beneficial ownership of the shares. The order remains in place.

An approach was made to the courts last year on behalf of Mr Craig Bond, son of the jailed Australian tycoon, Alan Bond, to have the order lifted on the grounds that Mr Craig Bond was the owner of Mir Oil. Mr MacCann concludes in his report that Mr Bond "is not now and never has been the beneficial owner of all or any part of Mir Oil".

He also concludes that a false report on oil flows released in October 1996, was prepared at the request of Mr Stanley and a geologist, Mr Tim Howell. The report was later withdrawn by Bula.

Bula Resources plc has about 30,000 shareholders, many of them with small investments. The company lost over £20 million in two disastrous oil ventures in Russia negotiated by Mr Stanley. Its shares currently sell at 1.25p.

Ms Harney said the Bula report should serve as a warning to all shareholders that they should use every opportunity to seek information and demand explanations of their boards of directors.

She said she was "concerned to learn from Mr MacCann's report that neither the register of directors' interests and shares nor the register of significant share holdings was kept by the company as required by statute, until Mr MacCann sought to see the registers as part of his investigation".