Hey there, time traveller!
This article was published 19/12/2012 (1377 days ago), so information in it may no longer be current.
A third shareholder has joined legal action against Tribal Council Investment Group (TCIG).
On Wednesday, TCIG was served with its third legal action from shareholders asking the court to order an investigation by professional services firm PricewaterhouseCoopers. Depending on the results of the investigation, it is asking the court to appoint that firm as receiver.
West Regional Tribal Council now joins Dakota Ojibway Investments (DOI) and Keewatin Tribal Council -- three of TCIG's seven shareholders -- in a legal action to compel TCIG to disclose corporate articles and bylaws and financial documentation.
The notice of application refers to a section of the Canada Business Corporations Act and asks the court to declare TCIG "has breached its obligations to the applicant (WRTC) in a manner that is oppressive or unfairly prejudicial to the applicant."
Later, it says, "The applicant is concerned that the business of the respondent has been carried out in a manner that unfairly disregards the interests of the applicant and other stakeholders."
The legal action by the three shareholders is being pursued in unison.
Lawyers for TCIG and the three tribal councils appeared in court Wednesday.
An agreement had been reached prior to court whereby TCIG withdrew an attempt to buy back DOI's shares in the corporation.
Previously, TCIG had claimed DOI had breached a confidentiality agreement giving TCIG the right to buy DOI's shares back.
To date, neither Keewatin Tribal Council nor West Region Tribal Council have been subject to such a buy-back scenario.
Since being formed in the early 1990s with $25,000 investments from Manitoba's seven tribal councils, TCIG built a successful group of operating companies and investment holdings.
Regular and generous dividends were being paid annually to the tribal councils until the last couple of years when the dividend system was changed. Now, returns -- totally a lot less than the previous $100,000 annual dividends -- are paid to the tribal councils based on a formula around patronage of TCIG companies.
The Free Press has learned TCIG has been losing money since 2010.
Officials from various tribal councils have made several efforts to gain greater clarity about the financial state of affairs at TCIG, but management has deflected those requests, stating it has fulfilled all of its disclosure obligations.
It is not clear exactly what role the board of directors plays in the scenario that is emerging.
According to some of those officials, the level of frustration has grown amidst reports that at least some of the recent losses are a result of a purchase two years ago of a corporate jet. The operation of the jet has been creating losses of more than $600,000 per year.
Significant layoffs at TCIG's head office in the fall were made in an effort to cut costs. But internal documents obtained by the Free Press show about $300,000 in credit card expenses for the first eight months of 2012 from credit cards assigned to CEO Allan McLeod and chief financial officer Rob Magnusson.
A TCIG official said, "It's always disappointing when business associates/partners find themselves in court over disputes like this. We are confident that as a company we have fulfilled our reporting obligations to all shareholders. We hope that this matter can be resolved quickly and amicably, while we work to ensure that this sort of situation does not arise in the future."