Applies to -- EVCM
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E-Vegas.com in seed share dispute with Dil Gujral
EVCM
Shares issued 0 close $0
Friday Sep 10 1999
Also Cachet Enterprises Corp (CED)
by Brent Mudry
In a new pickle for Cachet Enterprises president Dil Gujral, the notable Vancouver stock promoter has been cut out of an OTC Bulletin Board Internet gambling promotion, E-Vegas.com. In a statement of claim filed Aug. 27 in the Supreme Court of British Columbia, the Vancouver Stock Exchange graduation candidate claims fellow Vancouver stock promoters Ed Gallagher and Antal "Tony" Markus reneged on an initial deal for him to get one-third of E-Vegas.com's seed shares. The named defendants include Vancouver-based Mr. Gallagher and his President's Corporate Group, associate Erwin Liem, and Kelowna-based Mr. Markus. No statements of defence have yet been filed.
Mr. Gujral's Howe Street lawyer, Rose-Marie Basham, seeks 2.45 million to 4.7 million E-Vegas.com shares for her client. E-Vegas.com's shares have tripled since the suit was filed, rising from 19 U.S. cents to Friday's closing price of 62 U.S. cents. The value of Mr. Gujral's claimed block of shares has risen from a range of $465,000 (U.S.) to $893,000 (U.S.) when the suit was filed two weeks ago, to a range of $1.52-million (U.S.) to $2.91-million (U.S.) on Friday.
While E-Vegas.com is a bulletin-board promotion, its star players are familiar faces on Howe Street, the centre of dealings on the VSE. Mr. Gujral has played significant roles in numerous notable VSE promotions over the years, ranging from controversial Australian promoter Graham Ferguson Lacey's Shepherd Insurance Group and repeat securities violator Robert Reid's Dimples Diapers in the past to Cachet, Colossal Resources and Vantage Enterprises more recently. Mr. Gallagher co-founded Canada Payphone, a Union Securities promotion, and served recent stints with Mr. Liem in First Telecom, Rangestar Telecommunications and Global Cogenix Industrial, amongst other VSE listings. Mr. Markus has a lower Howe Street profile, serving as a director of Merlin Resources, named after the street he lives on in Kelowna.
The current suit traces E-Vegas.com's origins back to February, when Mr. Gallagher, acting on behalf of himself, Mr. Markus, Mr. Liem and then-unformed President's Group, allegedly asked Mr. Gujral to lend them enough money to pick up a Nevada shell company called E-Casino Gaming, for the purpose of establishing an on-line gambling site. Mr. Gujral claims he agreed to lend $30,000 (U.S.) in return for one-third of the issued seed shares, one board position and an option to purchase more shares. In this first deal, the other seed shareholders would be Mr. Markus and President's Group, each with a one-third stake of E-Casino's 15 million shares.
Mr. Gujral now complains that after loaning the $30,000 (U.S.), he received only 300,000 shares of the company, since renamed E-Vegas.com. The suit claims that in late April or early May, Mr. Markus, Mr. Gallagher and Mr. Liem told Mr. Gujral that the number of issued shares was actually 11.22 million, and he would take title for the agreed-on one-third stake. The one-third share stakes of Mr. Gujral, Mr. Markus and President's Group would all be held by a trustee and not released from trust except under written agreement by all parties.
Mr. Gujral claims he reluctantly consented to this second agreement with the pooling clause, but the defendants reneged on this second deal. The promoter claims his associates did not prepare a written agreement as promised and subsequently advised him that his stake would be cut from one-third to one-quarter of the 11.22 million shares, to allow an unnamed third party to enter the picture. On July 15, Mr. Gujral received a draft contract for this third agreement, in which he would receive 2.75 million shares and all the seed shares would be held by Fiduciary Trust in the secretive offshore haven of the Cayman Islands.
The suit claims that Mr. Gujral reluctantly agreed to this third agreement, but his associates cut him back a week later, on July 21. In this revised deal, the trustee company would be Fidesco Trust of St. Kitts, another offshore haven, and Mr. Gujral would receive just 1.2 million shares. The balance of the 11 million shares would be divided between Mr. Markus, with 1.62 million shares, and five other named persons, entities or companies, with the identities undisclosed in the suit.
Mr. Gujral claims he refused to accept this latest version of the deal, and he now seeks to enforce one of the previous three versions. The suit seeks either 4.7 million, 3.44 million or 2.45 million shares for Mr. Gujral, depending on which of the first three agreements can be enforced.
(c) Copyright 1999 Canjex Publishing Ltd. canada-stockwatch.com
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