Investment group eyes rebirth
New governance, accountability for groundbreaking aboriginal business organization
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Hey there, time traveller!
This article was published 17/06/2016 (2291 days ago), so information in it may no longer be current.
Heather Berthelette sits at a massive round boardroom table — one of the few remaining accoutrements of the old Tribal Councils Investment Group — and said the new group is committed to delivering on the mandate for which it was created.
“This business model is even more valuable today to First Nations than it was in 1990,” said Berthelette, the group’s chief operating officer.
The model was for the province’s seven tribal councils to pool money to invest in enterprises and distribute profits to the tribal councils that they could use for the betterment of the communities.
With some solid early investments — most notably the northern Canada Pepsi distributorship, Arctic Beverages — the group made a number of savvy investments. Over the years it was regularly able to make dividend payments to its shareholders.
But by 2013, it found itself over-leveraged and in trouble with its lenders. At the same time concerns were growing about financial controls and lavish spending at the head office that prompted the termination of the longtime CEO Allan McLeod and other members of the management team.
For the past few years, the Tribal Councils Investment Group has been cleaning up the aftermath of that messy collapse by selling off operating companies to pay off the bank loan and reorganizing its governance model and underlying vision.
It was left with essentially just one operating company, First Canadian Health Management Corporation (FCH), a partnership with a Toronto company that runs a nationwide medical, dental, and pharmaceutical claims processing service for the non-insured health benefits program of Health Canada.
That business regularly generates healthy cash flow, and it has now become the financial base from which to launch the reincarnation of the group.
For much of the past year, Berthelette has been working with a company called ARA Pharmaceuticals Inc. in the development of a blood-glucose tester, the Spirit Meter, that it is launching next week along with a new group subsidiary, First Canadian Pharmaceutical Services Inc.
Berthelette, who worked for a number of years with one of the group’s reliable performers, Precambrian Wholesale, said she and the new board of directors are committed to a new spirit of accountability.
“If we are going to stay in existence, let’s do it for the right reasons and do it the right way,” she said. “This is not about making a big business machine that ends up feeding itself.”
A new board structure has been established that Berthelette said will work the same now as it will if it becomes a $10-million operation or a $100-million operation.
Dennis Meeches, the chief of Long Plain First Nation and the chairman of the group’s board of directors, said, “We don’t want to repeat the mistakes of the past. We have taken strong steps to strengthen our governance. The big push for (the group) is accountability and transparency. It was not there for a long time. (If it was) all this would not have happened.”
Wanda Wuttunee, a professor of native studies at the University of Manitoba and the former director of the aboriginal business education program at the Asper School of Business, said the new approach may better suit the needs of Manitoba First Nations.
But Wuttunee says the new Tribal Councils Investment Group does not seem to be as exciting, or innovative or potentially groundbreaking as the original one was.
“It’s not as sexy,” she said. “(The group) was cool because it was unique. There wasn’t anybody else doing it like that. I’m not talking about all the bad stuff, but the model, the idea of what it was supposed to do.”
Unfortunately, among the remnants of that old model is a massive wrongful-dismissal suit filed by McLeod that is still far from over. The court documents already fill two boxes and the case has been mired in disagreements turning it into a “procedural mess.”
In February, the group changed lawyers, and Berthelette acknowledged “We are quite possibly a few years away from getting any sort of solution to the situation.”
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.