Hello Curtis:
It seems to me that the changes in auditors has a deeper significance.
First we have the company's notice (dated 1 Sep 1998)of the annual general meeting. To my copy is attached a "Notice of change of auditors" dated 31 Aug 1998 indicating that the company will seek approval at the meeting for a change in auditors from Dick Cook Schulli to Deloitte & Touche. Also attached are statements, dated 1 Sep 1999, from each of these two auditing firms.
Now, read the letter from Dick Cook Schulli carefully. On the surface it looks like the usual declaration that there have not been any reportable events. But the wording is convoluted, and it looks to me as though they have restricted their statement to the period after completion of the fiscal 1998 audit. I am not sure about this. I suspect there may have been something while the audit was actually being carried out.
The next change is far more significant. It is the change referred to in the "Notice of change of auditors" dated 20 July 1999, whereunder Deloitte & Touche are replaced by John Powell Professional Corp., subject to the approval of shareholders at the next annual meeting. This notice was filed with SEDAR on 13 Sep 1999. As far as I can trace, it was not distributed or made public before the latter date.
This second change cries out for an explanation. Why is the auditor changed 3 1/2 months after the fiscal year end when the audit is incomplete and is due to be filed within one month? And why is the letter dated 30 July 1999 from Deloitte & Touche acknowledging the change not filed with SEDAR until 13 Sep 1999?
Then comes the third change, in the notice dated 12 Aug 1999, when the company proposes to seek shareholder approval at the next annual general meeting for a change to Dick Cook Schulli. This too was not made public until it was filed with SEDAR together with the letter from Dick Cook Schulli on 13 Sep 1999.
It looks to me as though they were chasing around town trying to find someone who would agree not to make waves.
Now that management changes have been made this may not seem very relevant, but I am wondering who, if anyone, signed the auditor's report. Surely, neither John Powell Professional Corp. nor Dick Cook Schulli managed to plough through the mess during the short time that they were on the job? Am I correct in supposing that John Powell is still the auditor, in that previous management did not propose replacing him until they got approval? Or was he never actually appointed? Perhaps there is no appointed auditor at present? But the auditor's report filed with SEDAR on 8 Sep 1999 gives the name of Dick Cook Schulli as the auditor. "O what a tangled web we weave, When first we practice to deceive."
If the discontinuance of Deloitte & Touche had been known at the time it was effected, in July 1999, would that not have prompted shareholders to take action, if only by selling out? Do they not have grounds for civil action against Blaine Maller and the other directors?
John |
