March 30, 2002 - Eves's former firm under scrutiny over Hydro offer
NDP wants inquiry into bank's 'lucrative' share of action
National Post
TORONTO - Ernie Eves's former employer, Credit Suisse First Boston, is listed as one of the underwriters in the Hydro One privatization prospectus, Howard Hampton, the New Democratic party Leader, revealed yesterday, calling for an inquiry by the Ontario Integrity Commissioner.
"Ernie Eves has a lot of explaining to do," Mr. Hampton said. "Why did his former employer get a chunk of the most lucrative initial public offering in Canadian history days after its prize employee becomes premier-elect? Did Mr. Eves intervene to get them included, or did other government officials just think he'd want the company to get part of the action? This doesn't look right."
Mr. Eves was vice-chairman of CSFB Canada until he won the Progressive Conservative leadership last weekend.
Mike Harris, the outgoing Premier, announced in December that the province is selling off Hydro One, the Crown corporation responsible for electricity distribution and transmission, through an initial public-share offering worth as much as $5-billion.
Major investment banks have been eager to win a share of fees that could be as high as $250-million for orchestrating the IPO.
Page 103 of the Hydro One prospectus, issued on Thursday, reads: "Hydro One, the province and the underwriters named below have entered into an underwriting agreement with respect to the common shares being offered. Subject to certain conditions each of the underwriters has severally agreed to purchase from the province the number of common shares indicated in the following tables."
Among the companies listed is Credit Suisse First Boston. The number of shares is not indicated for either Credit Suisse First Boston or the other companies.
Mr. Hampton said he will ask the Ontario Integrity Commissioner to investigate the agreement, which he called "a cynical marketing scheme to cover up the disastrous sell-off of Hydro One."
He also claimed there are no restrictions on foreign ownership, raising the possibility the corporation could slip into foreign hands.
Mr. Eves was unavailable for comment yesterday. He has refused opposition demands to reveal his client list while at CSFB, insisting he was not involved in the Hydro One file.
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