IBI Corp - News Release
IBI obtains interim injunction against Lai
IBI Corp
YIB
Shares issued 226,295,600
Jan 30 2002 close $.050
Wednesday Jan 30 2002
News Release
Mr. Gary Fitchett reports
IBI CORPORATION: INJUNCTION AGAINST EDWARD LAI, ET AL
IBI Corp. has obtained an interim and interlocutory Mareva injunction and other
relief against Edward Lai and 18 other named defendants.
An ex parte motion (without notice) in this matter was brought before Judge J.E.
Sheppard in the Ontario Superior Court of Justice on Jan. 22, 2002, and all
matters requested in the court filings were granted. Among the issues included in
the motion were leave of the court to:
amend the company's statement of defence and counterclaim with Mr. Lai, to,
among other matters, add 18 defendants to the counterclaim and make the
allegations set out below (as reported in Stockwatch on Aug. 31, 2001);
restrain Mr. Lai and 13 related and/or connected corporations from transferring or
disposing of any of their shares or securities in or of IBI or any other money,
property or assets situated in the province of Ontario or elsewhere; and
restrain Selvin, Shirley and Roger Lee, and Larry and Susan Marshall from
transferring or disposing of any of their shares or securities in or of IBI.
The named defendants are:
Edward Lai, Kimberley & Co. Ltd., Sumar Ventures Inc., S.S.E.L. Corp.,
Bancorp Pacifico S.A., E. & S. Project Management Ltd., 1054737 Ontario
Ltd., 1099950 Ontario Ltd., 1099953 Ontario Ltd., 1107106 Ontario Ltd.,
1113607 Ontario Ltd., P-Shine Trading Ltd., P-S Trading Ltd. and 1211185
Ontario Ltd.; and
Larry Marshall, Susan Marshall, Selvin Lee, Shirley Lee and Roger Lee
(collectively known as the defendants).
The allegations in the company's counterclaim are that Edward Lai and Selvin Lee
are the beneficial owners and/or controlling mind for various of the aforementioned
corporations, and conspired with Larry Marshall in the significant reverse takeover
transactions that resulted in the issuance collectively of 95 million shares of the
company to most of the defendants. The company's allegations have not been
proven to the court and await defences by the defendants.
This is an interim Mareva injunction, returnable to the court on Feb. 7, 2002,
permitting the defendants an opportunity to respond.
The company has been carrying out a detailed and exhaustive investigation over
the past year and has put together a comprehensive analysis with supporting
documentation sufficient to satisfy the court that the company has a good prima
facie case. Most matters relate to the origination of the company as a reverse
takeover in 1994 and 1995, and subsequent activities and actions by management
through to 1998 and 1999.
The amended counterclaim, based in part on the share exchanges with Meliorex
Restorations Inc., Desarrollo Bosque Esmeralda del Sur S.A., Norino's Seafood
Inc. and NorthStar Seafood Inc. may be summarized as:
damages of $6.5-million, resulting from fraudulent or negligent misrepresentation,
conspiracy and collusion among some or all of such parties to deceive IBI and/or
to assist Mr. Lai and Mr. Lee in the breach of their fiduciary duties to IBI, and/or
unjust enrichment; and
punitive and exemplary damage of $3-million; allocated among various defendants
as applicable.
The amended counterclaim also defines the following additional pecuniary claims:
against Mr. Lai, the sum of $5-million resulting from breaches by Mr. Lai of his
fiduciary duties to IBI; and
against each of Mr. Lai, Mr. Lee and Mr. Marshall the sum of $3-million as
punitive or exemplary damages.
In the claims outlined above, the company also seeks prejudgment interest from
Dec. 22, 1994, in accordance with the Courts of Justice Act.
Furthermore, the counterclaim on behalf of the company requests, in respect of
IBI shares currently or previously held by each defendant:
a declaration that the shares in the possession of such defendants were obtained
through deceit, or the breach of fiduciary duties by Mr. Lai or Mr. Lee and/or that
the defendants have been unjustly enriched at the expense and to the detriment of
IBI;
a direction to all of the defendants to surrender to IBI all share certificates
representing all shares of IBI in their possession;
a direction to all of the defendants to account for all IBI shares that are or have
been in their possession; and
an interim and interlocutory injunction restraining certain defendants from disposing
of any of their money, property and/or assets, including shares and securities in or
of IBI, and other defendants from disposing of their shares and securities in or of
IBI.
The allegations of fraud, misrepresentation, negligence, breach of fiduciary duty to
the company and breach of securities and corporate laws have not been proven in
court. Depending on the response of the defendants to these serious allegations,
the litigation of the issues in court could be a lengthy procedure.
The investigation will continue in respect of the roles of other directors, employees
and associates who may have colluded with Mr. Lai, Mr. Lee and Mr. Marshall in
respect of the matters cited, or breached their fiduciary duty to the company, and
they may be added as co-defendants at a later date.
Gary A. Fitchett, president and chief executive officer, reporting to the board of
directors, said, "This is the first step to purge the company of past mismanagement
and negligent behaviour, and to arrest the flow of share dispositions into the
market for personal pecuniary gain, at the expense of building real shareholder
value." He noted that in spite of these "millstones," the new management retained
its focus and has made remarkable progress in bringing its world-class vermiculite
project to commercial production.
The board of directors noted that, "Certain shareholders took aggressive and
forward-looking action two years ago to force a change of management and
stewardship in the company, and to support a general movement of rejuvenation,
leading to the substantial current success." The board acknowledged the
importance of the new IBI in taking a leadership role among publicly traded
corporations in restructuring and refinancing the company onto a sound, focused
and ethical platform.
The company has 226,295,600 shares issued and outstanding, prior to any
cancellation of shares resulting from the actions noted above.
(c) Copyright 2002 Canjex Publishing Ltd. canada-stockwatch.com
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