Multivision's Nazerali testifies about Kott, Dutch deal
2015-04-13 20:57 ET - Street Wire
by Mike Caswell
Vancouver promoter Aly Nazerali testified at his own defamation trial on the afternoon of Monday, April 13, giving his life history, at times at length, and explaining dealings he had with notorious Canadian Irving Kott. Mr. Nazerali said he only briefly dealt with Mr. Kott as part of a deal to acquire a controversial Dutch firm, First Commerce Securities. As he understood it, Mr. Kott was simply a consultant.
Mr. Nazerali was testifying as part of a defamation case he is pursuing against short-selling conspiracy theorist Patrick Byrne, journalist Mark Mitchell and others. He complains about a series of chapters the men posted to a website called Deep Capture, which he says accused him of being a drug dealer, terrorist, fraud artist and gangster. The chapters also said he was part of a group of market manipulators that had ties to the Russian Mafia and terrorist groups, he complained.
| | ALYNAZERALI.COM | | Aly Nazerali |
Mr. Nazerali began his testimony by describing his upbringing, giving many details of his life outside of the stock market. Among other things, he was born in Africa (where he lived for 10 years), is fluent in a dozen or so languages "when sober," and has lived in Europe and the United States. He received an MBA in finance from Columbia College in New York in 1974 and studied Islam. His employers have included a Belgian construction company, for which he managed 15 projects.
A portion of his testimony centered on his dealings with Mr. Kott. (Mr. Kott was a well-known Canadian in stock market circles. He pleaded guilty in Quebec to charges of conspiracy to defraud investors in a company called Somed Mines Ltd. He received a $500,000 fine. The Deep Capture posts that Mr. Nazerali complains of stated that he had negotiated with Mr. Kott to acquire a boiler room in Amsterdam which sold "securities of negligible value.")
Mr. Nazerali testified that his dealings with Mr. Kott came about when he and others were looking at taking over First Commerce Securities. He said the firm had received some bad publicity, which he described as being the result of "making a market in unregulated securities." He and his associates saw it as an opportunity to turn around a struggling business.
As part of the negotiations to acquire First Commerce, he met the man he thought owned the firm, a Bahamian lawyer called Dawson Roberts. He testified that the men met in London, with the meeting also attended by Mr. Kott. According to Mr. Nazerali, he had never met Mr. Kott prior to that date. He also understood Mr. Kott to simply be there as a consultant.
Mr. Nazerali testified that after some negotiating the men reached an agreement in principle in which he and his associates would acquire First Commerce. He then took a position on the firm's supervisory board, overseeing many changes. These included restrictions on when employees could perform cold-calls and having employees tell investors about the high levels of risk with some securities.
After some time, Mr. Nazerali left First Commerce and abandoned his agreement in principle to acquire the firm. He said this happened because the vendors were unable to satisfy all the conditions of the sale. There was also the issue of it being "practically impossible to turn this company around," he said. Around the same time, the Dutch government moved to regulate First Commerce and other such firms, and it ultimately refused to grant First Commerce a licence, ending its operations.
The controversy surrounding First Commerce did not end there, however. Mr. Nazerali testified that for some time after the firm went out of business Dutch prosecutors were actively investigating him and others for their involvement. He submitted to a police interview that lasted two or three days. There was also a receiver that was pursuing him over money he had allegedly transferred from the firm. Ultimately these issues both worked in Mr. Nazerali's favour, he said. Prosecutors discontinued their investigation and he defeated civil proceedings from First Commerce's receiver.
Mr. Nazerali's testimony also touched on his involvement with other organizations that Deep Capture associated him with, including an entity called the Gulf Group. (The Deep Capture posts said that Gulf Group was an international criminal organization that engaged in fraud, arms trading and money laundering.) Mr. Nazerali testified that when he worked at the Gulf Group it traded in industrial goods, representing brands such as Panasonic and Peugot. It had been around for decades. He left the Gulf Group after a dispute over his pay, he said.
In addition, Mr. Nazerali testified about his links to the Bank of Credit and Commerce International, or BCCI. (One of the Deep Capture chapters described BCCI as "the massive criminal enterprise that did business with everyone from La Cosa Nostra and the Russian Mafia to Columbian [sic] drug cartels." The chapter also said that Mr. Nazerali was an important figure at the firm.) Mr. Nazerali, however, says he was simply a client. In the 1980s he was running a brokerage firm in Europe, and he required banking services. He selected BCCI because it had an international presence and was quick to execute transactions.
Mr. Nazerali finished the day's testimony explaining that he decided to live in Vancouver in the 1990s. He selected the city so he could have a place for his children to attend school with some continuity. He had to that point been moving frequently. After relocating to the city he had roles with many venture companies. The only TSX-V listing that he remains involved with is Multivision Communications Corp.
Mr. Nazerali is represented in the case by Vancouver lawyer Dan Burnett. In addition to Mr. Byrne and Mr. Mitchell, the defendants at trial are Internet retailer Overstock.com Inc., Deep Capture LLC, High Plains Investments LLC and Overstock employee Judd Bagley. |
