YBM MAGNEX DIRECTORS INTERVIEWED BY RCMP
Canadian force helps FBI; asked 'very simple questions,' official says
Paul Waldie
The Globe and Mail Wednesday August 12, 1998
The RCMP has interviewed Canadian directors of YBM Magnex International Inc., and is helping the FBI in its investigation of the company."
"Oh, heavens yes," YBM director Kenneth Davies said yesterday when asked if he had been interviewed recently by the Royal Canadian Mounted Police.
"Don't be surprised, because it's not like a big deal," added Mr. Davies, who lives in White Rock, B.C.
"In fact they wouldn't be doing their job if they didn't ask. They just asked very, very simple questions. I said anything you want you can ask. I have no problem whatsoever."
Mr. Davies, 56, said he was told that other YBM directors have been interviewed by the RCMP as well. YBM has two other Canadian directors -- Owen Mitchell, a vice-president at Toronto-based First Marathon Securities Ltd., and Michael Schmidt, a Burnaby, B.C., realtor. Former Ontario premier David Peterson resigned as a director this week.
None were available for comment and YBM officials did not return phone calls yesterday.
Officials in the RCMP's commercial crime unit in Vancouver confirmed that a file on YBM has been opened, and that the force is helping the FBI.
YBM is based in Pennsylvania, but trades on the Toronto Stock Exchange. Trading in its shares has been halted since May, when the FBI raided the company's head office in connection with a criminal investigation. The company has denied any wrongdoing. YBM's auditor, Deloitte & Touche, quit last spring after refusing to sign the company's 1997 financial statement.
YBM, which makes industrial magnets at plants in Hungary and the United States, was formed by a business that has links to Simeon Mogilevitch, an alleged Russian mob figure.
Mr. Davies played down the FBI raid.
"It is normal. Because any foreign company that comes into the U.S. that is from the Eastern bloc, I assure you that the FBI, the XYZ and everybody else and their dog is standing at the door taking a look and seeing what's happening. We have been investigated since Day One."
Mr. Davies added that Mr. Mogilevitch has nothing to do with YBM's operations and that the Russian mafia stories unfairly taint the company.
"I wouldn't even know how to get a hold of the Russian mafia."
He said Mr. Peterson told the board last month that he wanted to resign.
"I think he had too many things on his plate," Mr. Davies said. "I think when you are under a lot of pressure and that, you say 'Look boys, I got too many things on my plate, I just don't have the stress level to handle all this,' because there is a lot of stress in this."
Mr. Davies has been a director since YBM was formed in 1994. He said no other directors have said they want to resign.
He added that the board has done its best to address the concerns raised by Deloitte & Touche. However, the company is having great difficulty finding a new auditor.
"It's hard work because there are not that many auditors that are in a position to work around the world," he said.
This week, Igor Fisherman, the chief operating officer who was also responsible for Eastern European operations, agreed to a suspension pending a further review by the company. In June, YBM said Mr. Fisherman and others engaged in "significant breaches in corporate policy and common business prudence."
Mr. Davies praised Mr. Fisherman but added that he had to step down pending the review. "He has done the appropriate thing and he did it willingly."
Mr. Davies said all businesses encounter problems. |
