Royal Group Technologies founder De Zen and others charged with fraud
1 hour ago
TORONTO — A decade after the alleged wrongdoing, RCMP have laid fraud charges against Royal Group Technologies Ltd. founder Vic De Zen and other former executives of the plastic building products manufacturer.
Police said Thursday that De Zen and three other former executives defrauded the company of $27.4 million in a deal involving property north of Toronto.
De Zen and four other men, including two named in the other charges, are also alleged to have defrauded Royal Group of $2 million in the sale of a subsidiary.
The alleged offences occurred during 1997 and 1998, and the charges come almost five years after De Zen stepped aside as chief executive officer.
Royal Group, based in Woodbridge, north of Toronto, was acquired in late 2006 for C$1.7 billion by Georgia Gulf Corp. of Atlanta.
The long-running police investigation triggered the resignation of Greg Sorbara as Ontario finance minister in October 2005 after he was linked to the probe. He returned as finance minister in May 2006 after a judge found no reason for his name to have been included on a search warrant. Sorbara left cabinet last October but remains an MPP.
"The charges laid today illustrate the scope and complexity of the work being done by IMET teams across the country every day," stated Chief Superintendent Stephen White, head of the RCMP's Integrated Market Enforcement Teams.
"It is our hope that these types of results will act as a strong deterrent by demonstrating that Canada's financial markets are being policed."
The alleged $27.4-million fraud arises from a deal in which land in Vaughan is said to have been purchased by individuals closely associated with Royal Group and then sold to the company at an inflated price.
In addition to De Zen, those charged include Douglas Dunsmuir, who was Royal Group's general counsel and succeeded De Zen as president, along with two former chief financial officers, Gary Brown and Ron Goegan.
The alleged $2-million fraud relates to the sale of Royal Group subsidiary Steelwood Doors to Premdor Inc., which included a warrant to buy 200,000 Premdor shares. RCMP charge that the warrant was not entered into Royal Group's books and instead was exercised by senior executives for their own benefit.
Charged in this case are De Zen, Dunsmuir and Goegan, along with Luciano Galasso, a former vice-president of Royal Group, and Gordon Brocklehurst, former director of accounting.
Royal Group, making plastic pipe, window frames, outdoor furniture and a range of other products, was founded by De Zen in 1970 as Royal Plastics Group.
The company developed a construction technique in which plastic frames are filled with concrete, and grew rapidly, going public in 1994.
Its stock price rose steeply - while De Zen retained voting control and paid himself hefty bonuses - and sales grew to $2 billion annually by 1997, when the corporation was renamed Royal Group Technologies.
Investor unease set in during 2003 as earnings sagged and the stock price tumbled from over $30 to under $7, though it revived in following months as De Zen resigned as CEO while remaining chairman.
The shares fell again when RCMP and the OSC announced in early 2004 that they were investigating land deals in the Caribbean, and again later that year when the purchase of the 75-hectare plot north of Toronto came under scrutiny, prompting the departure of De Zen, Dunsmuir and Goegan.
RCMP said the IMET investigation was conducted in conjunction with the Ontario Securities Commission, the Canada Revenue Agency and federal prosecutors.
An RCMP spokesman said a court appearance in the case was set for Aug. 11.
In addition to Sorbara, the Bank of Nova Scotia had its name dragged into the probe when RCMP set up a mobile command post outside its head office at King and Bay streets while seizing documents in February 2005.
Thursday, June 19, 2008
Royal Group Technologies founder De Zen and others charged with fraud
Shell shuts down Nigerian oil field after attack
Shell shuts down Nigerian oil field after attack
EDWARD HARRIS
Thursday, June 19, 2008
LAGOS, Nigeria — Royal Dutch Shell said it shut down production from an offshore oil field that produces about 200,000 barrels per day after the most powerful militant group in Nigeria launched an attack on an installation there Thursday.
Oil prices rose in Asia on the news, which raised concerns about possible supply outages in Africa's largest oil producer.
The group also said it captured an American worker on a supply vessel in the area of the rig.
A leader of the Movement for the Emancipation of the Niger Delta told The Associated Press militants attacked the Bonga oil field more than 85 miles from land. But the fighters weren't able to enter a computer control room, which they had hoped to destroy.
The militant leader spoke on condition of anonymity to avoid punishment by authorities.
“The location for today's attack was deliberately chosen to remove any notion that offshore oil exploration is far from our reach,” the group said in a subsequent statement. “The oil companies and their collaborators do not have any place to hide in conducting their nefarious activities.”
Olav Ljosne, a spokesman for Royal Dutch Shell, confirmed an attack, but gave no details. He said production had been stopped from the field, which normally produces about 200,000 barrels of crude per day.
That accounts for about 10 per cent of Nigeria's current daily output of about 2 million barrels per day production — already significantly off the amount produced before years of militant attacks on crucial oil infrastructure.
The militants also said they kidnapped an American worker from a supply vessel they encountered while returning home from the attack. The seizure was confirmed by private security officials, speaking on condition of anonymity because they are prohibited from speaking to the media. The officials said two other seamen on board were injured in that attack.
Over 200 foreign hostages have been seized since an upsurge of violence that began in early 2006. The hostages are normally released unharmed after a ransom is paid.
Attacks against offshore facilities are exceedingly rare. Oil industry officials consider their operations on the high seas much safer than those in the creeks and swamps of Nigeria's southern Niger Delta, where most of the attacks during two years of increased violence have taken place.
Militant attacks on oil infrastructure have trimmed about a quarter of total oil production in Nigeria, which is Africa's biggest producer and a member of OPEC.
The turmoil in Nigeria's south has helped send oil prices to historical heights, giving the militants more leverage in their drive to force the federal government to send more oil industry proceeds to their areas.
Despite being the home of almost all of Nigeria's petroleum reserves, the country's south is as desperately poor as the rest of the country, which is Africa's most populous with 140 million people.
But criminality and militancy are closely linked, with many of the militant groups accused of stealing crude oil from wells and pipelines for sale in overseas market and helping politicians rig elections.
© Copyright The Globe and Mail
Wednesday, June 18, 2008
TLM Huge Crosses After Close
Canada's benchmark index eked out a gain on Wednesday afternoon after the price of crude oil lifted energy stocks toward the end of the day, but financials remained weak.
The S[amp]amp;P/TSX composite index closed at 15,073.13, up 4.3 points but flat in percentage terms. The energy sub-index, down with the price of oil throughout most of the day, bounced to a 0.9 per cent gain in the afternoon after oil prices rebounded to $136.33 (U.S.) a barrel, up $2.32. EnCana Corp. rose 2 per cent and Canadian Natural Resources Ltd. rose 2.6 per cent.
Financials, meanwhile, looked ugly from the get-go, when Morgan Stanley reported a steep drop in its second-quarter earnings, Fifth Third Bancorp sliced its dividend and a hedge fund manager warned of enormous losses and writedowns still to come. In Canada, Manulife Financial Corp. fell 1.5 per cent, making it the biggest single drag on the index, Royal Bank of Canada fell 1.3 per cent and Toronto-Dominion Bank fell 1.7 per cent.
In the United States, the rebound in oil prices did not help matters, of course. Plus, investors were gloomy after FedEx Corp. shocked the market with a fiscal fourth-quarter loss and lower guidance for the first quarter – a sign that high energy costs (surprise!) and lower economic activity (surprise!) are biting the bellwethers. FedEx shares fell 2.1 per cent.
The Dow Jones industrial average closed at 12,029.06, down 131.24 points, or 1 per cent - its second triple-digit loss in two days. The index dipped below the 12,000-mark – a psychological hurdle for investors and observers who like round numbers – for the first time since March, falling as low as 11,994 in afternoon trading.
The broader S[amp]amp;P 500 closed at 1337.81, down 13.12 points, or 1 per cent. Fifth Third Bancorp plunged 27.3 per cent and dragged down other regional banks. Regions Financial Corp., for example, fell 10.5 per cent.
[amp]nbsp;
© Copyright The Globe and Mail
Oil No bubble trouble?
No bubble trouble?
Wednesday, June 18, 2008
How should investors interpret the latest findings from a UBS survey on attitudes toward oil prices?
The UBS survey of 1048 equity analysts and strategists concluded that most investors do not believe that oil prices are[amp]nbsp;a bubble about to pop: When asked “Are energy prices in a ‘bubble' similar to tech or real estate?”,[amp]nbsp;56 per cent of respondents answered ‘No' and 44 per cent answered ‘Yes', according to UBS.
“Our interpretation of results: it is no longer ‘contrarian' to expect prices to stay high,” said Thomas Doerflinger and David Bianco, strategists at UBS, in a note to clients.
Some people believe that you can't have a bubble when just about everyone believes there is a bubble – because that widespread skepticism would translate into rational prices. On the other hand, if few people believe there is a bubble, then prices have the means to keep rising. This is surely what drove the tech bubble in the late 1990s, when the "new era" view dominated those who said "this is nuts."
Contrarians might look at UBS's all-clear signal on the price of oil as a reason to be fearful that a bubble is indeed forming. Crude oil traded at $134.80 (U.S.) a barrel on Wednesday morning. So far this year, the price has risen just over 40 per cent.
[amp]nbsp;
© Copyright The Globe and Mail
