Hey there, time traveller!
This article was published 30/11/2012 (1306 days ago), so information in it may no longer be current.
The Tribal Council Investment Group is striking back against its harshest critics.
In the wake of an internal battle over financial accountability and transparency, TCIG's board of directors is taking steps to oust its critics by buying back their shares in the corporation.
The move comes after Dakota Ojibway Investments Ltd. (DOI) filed a notice of application in Manitoba court on Monday claiming shareholder oppression and demanding details related to operational costs and expenses.
TCIG's board claims DOI has breached the shareholders' confidentiality obligations, and has "caused irreparable harm to the corporation." It says the breach triggers a clause allowing TCIG to purchase DOI's interest in the corporation. DOI is the investment arm of Dakota Ojibway Tribal Council.
Despite TCIG's counterattack and earlier claims all appropriate disclosures are being made, DOI's legal challenge is still proceeding, says DOI's lawyer Rick Schwartz.
TCIG, under the leadership of CEO Allan McLeod, has built a sizable portfolio of assets and operating companies generating about $100 million in annual revenue, including a Pepsi distribution business and multimillion-dollar fuel and wholesale businesses.
But it retains a very low-key public profile.
"The silence is deafening," says Allan Park, the CEO of Tribal Wi-Chi-Way-Win Capital Corp., a Manitoba Aboriginal financial institution.
Park was not criticizing TCIG, only noting there are scant interconnections between the First Nation-owned players in the Manitoba business community.
TCIG is owned by the seven tribal councils of Manitoba, each of whom invested $25,000 at its inception in the early 1990s. The tribal councils have received generous returns on their investment, totalling $17.5 million in dividends.
But in 2010, TCIG's board agreed to a new form of patronage payments to the tribal councils based on the amount of business each particular band conducts with TCIG companies.
That new patronage system has seen disbursement to some tribal councils decline as much as 75 per cent, according to documents obtained by the Free Press. The documents also show TCIG has sustained overall losses of about $4.7 million the last two years and is on pace to lose $3.3 million this year, which has also hurt disbursements.
Besides David Meeches, the chief of Long Plain First Nation and the chairman of DOTC, more chiefs are questioning the corporation's operations and cost structure now that the TCIG dividend has been drastically curtailed.
Among its challenges, DOI is seeking information on employment contracts and expenses of senior management and flight logs and costs associated with the operation of a corporate jet acquired two years ago during the liquidation of Canwest Global Communications Corp.
At the time, McLeod told the Free Press: "This is a high-quality asset that we have bought at a good price that we will put to work to make us more money. That is how we expand distributions to our shareholders."
But internal TCIG documents show it has lost more than $600,000 per year on the operation of the plane.
The corporation began to implement austerity measures in the wake of the losses, and at least two former employees said about 12 people were laid off from the Portage and Main head office earlier this fall.
But prior to that, McLeod charged $174,000 in travel and entertainment expenses to his corporate credit card between January and August 2012, according to TCIG documents.
Meeches said many other Manitoba First Nations chiefs who are represented by other members of the board are supportive of DOTC's legal action but are reluctant to speak publicly.
One told the Free Press he is supportive of the legal action and "we may be in a better position to issue comments" at a later date.