Hey there, time traveller!
This article was published 22/1/2013 (1222 days ago), so information in it may no longer be current.
KPMG resigned as the auditor of Tribal Councils Investment Group in 2007 after it was denied the chance to speak to the board of the First Nations-owned investment firm about issues regarding directors, officers and employee compensation.
That is one of the disclosures made in an affidavit filed recently by Sharon McKay, chief executive officer of Keewatin Tribal Council.
The northern Manitoba tribal council that represents 11 northern First Nations has filed a notice of application against TCIG claiming, among other things, that it acted "in a manner that is oppressive or unfairly prejudicial" to KTC.
West Region Investment Ltd. and Dakota Ojibway Investments Ltd. have filed similar actions. They represent three of the seven tribal council shareholders of TCIG.
According to McKay's affidavit, she received a registered letter from KPMG in September 2007, followed by a telephone call from TCIG's chief executive officer, Allan McLeod, asking her not to open the envelope and return it to TCIG unopened. She was a director of TCIG at the time.
McKay's affidavit said she was told all other TCIG directors returned the KPMG registered envelope.
But she did not return it and, according to the affidavit, only opened it in 2011.
The envelope contained two letters, whose contents are disclosed in the court filing. One said KPMG wanted to discuss with the board of TCIG payments to "directors, officers and employees of TCIG, aggregating $3,540,000 during the year ended December 31, 2006."
The other said since KPMG was not allowed to meet with the board "to discuss matters that arose from our audits that, in our judgment are important and relevant to the boards of the corporations" it had "lost confidence in management and hereby tender our (KPMG's) resignation as auditors of the corporation."
The three tribal councils are seeking assistance from the court to get TCIG to disclose corporate bylaws, shareholder agreements, financial statements and other internal documents.
All three legal actions have been filed separately but are to be heard jointly.
TCIG was formed in the early 1990s with investments from the seven Manitoba tribal councils, each of which elected a member to TCIG's board of directors.
The company achieved significant growth and success due to savvy acquisitions and investments and paid handsome dividends for many years.
But profits declined, the dividends got smaller and for the past several years, according to the court filings, TCIG management has received several entreaties from its shareholders for more transparent reporting.
The company says it has met all its disclosure obligations to its shareholders.