I'm sending the following letter to Mr Krystie at
the OSC. I'm enquiring about what progress has been
made in their investigation, and hoping for some sort of
answer.
Dear Mr. Krystie:
With reference to your investigation regarding Allen-Vanguard. Please be advised that a large group of shareholders have presented our grievance and the offices of Siskind’s and is in the process of a “Class Action Suit” on behalf of the investors.
Please be advised that we do not plan to wait for the Class Action Suit and believe a criminal investigation should be launched against the company Allen-Vanguard and it’s CEO David Luxton.
There are many reasons to launch an investigation. Some of the reasons are as follows:
1.There are a lot of people watching what happens. IF the court approves this purchase as an alternative to CCAA who will be next? We guarantee there will be a flood of copy-cats, and corresponding lack in market confidence.
2. Have Allen Vanguard open their books. There is absolutely no way that Peter Allen's numbers will be validated by an external audit. Allen Vanguard has over inflated it’s impairment charges by 550 million dollars in less than one year. That amount translates to roughly $4.33 per share. Allen Vanguard effectively dealt away 80% of the company’s main assets in less than a year without independent valuation by an unrelated 3rd party which would evaluate assets, not only
on their present value but on future earnings potential. Allen-Vanguard advised of substantial staff layoffs occurring August 12, 2009 (57 employees), yet no substantial material change was reported. How can Allen-Vanguard make the claim that they are increasing their Research & Development by 263.5% ?
3. David Luxton hopes to compel a judge that it is in the best interest of the Government to allow this transaction to complete based on "expert" asset valuations. David Luxton will be discounting shareholders as wanting to see an
Allen-Vanguard "Scortched Earth" due to our losses, and discount our submissions.
4. Allen Vanguard is attempting to sell the corporation to an American investment firm. The problem is that they did so by negotiating behind closed doors, in silence, exclusively without announcing proper material changes. When you look back over the last 6 months they were obviously writing down assets setting this transaction up and now claiming they don't have to follow proper securities or Corporate Governance and allow shareholders to vote. They claim the deal doesn't cover the liabilities, therefore they have cancelled the shares without any compensation. As many small investors have invested relying on proper Corporate Governance and press releases claiming the business was a going concern, announcing sales, and making optimistic statements. When the Tailwind financing fell apart, a press release advised that they entered into "exclusive negotiations" for a three week period of DD and shareholder approval would be sought. Six months later they make a press release on a Saturday 12Sep09 that the deal is done and shares were cancelled. This company has benefited from large sums of Canadian tax payer money to develop its products, and now has given those developments to an American controlled company at a price well below its true value.
5. To see the heavily redacted Schedule A, go to www.sedar.com. Type Allen-Vanguard in company name, set the from date to September 21, 2009, click search, click on the big file (734 K). This is the apparent financial breakdown of the deal - why would they want to hide that? Why is Schedule A of the Versa deal 100% redacted on SEDAR?
6. Is Ms Monica Ryan, EDC's Compliance Officer related to Robert Ryan, Allen-Vanguard's Vice-President Corporate Development ? Can this deal actually hold together if EDC rules there is a conflict of interest or ethics compliance ? EDC’s former CFO, Peter Allen is hired by Allen-Vanguard less than 1 week after signing an “arduous financing deal” with RBC. Why did Peter Allen ask EDC for new financing AFTER Versa needed acquisition funds?
7. The Ottawa Citizen’s claim that Versa is putting up capital can’t be verified, as the rumours are that between EDC and the rest of the lenders – no new capital is required (unless you call Versa signing the EDC loan as “capital”.
Can anyone please explain how a company in such “dire straits” as Allen Vanguard claims is able to be bought by a US buyer when the buyer doesn’t even put $1.00 cash into the deal?
8. "Back-door" documentation permitting Allen-Vanguard to buy-out (BUY-BACK) Versa within 12-18 months at cost plus a small premium.
9. Bypassing current bankruptcy laws by requesting court approval without public disclosure of valuations.
10. Management increases research spending over 250% in year prior - with no new product or service announcement.
11. Med-Eng acquisition valuation is questioned as inappropriate, Allen-Vanguard management did not perform due diligence or obtain performance guarantees from vendors - David Luxton received significant bonus compensation for consummating the purchase of Med-Eng.
12. Canadian Government grants and subsidies used to develop licensed Canadian products will be in control of a foreign private corporation.
We await your investigation.
Respectfully,
(iaden) |
