Tuesday » January 9 » 2007
OSC extends trade halt
RCMP files key evidence in Sulja stock investigation
Gary Rennie
Windsor Star
Tuesday, January 09, 2007
TORONTO - The Ontario Securities Commission (OSC) ordered an extension Monday of its cease trading order against Sulja Brothers Building Supplies Ltd.'s penny stock until March 23 when a hearing on numerous allegations of securities violations will resume.
Based on exhibits of documents already filed with the OSC, key evidence in the case will come from a Nov. 6 recorded interview by the RCMP in Harrow with former Sulja CEO Petar Vucicevich and Andrew DeVries, a San Antonio, Tex., associate of Vucicevich.
Tom Anderson, a senior investigator for the OSC, said in an affidavit that it would take another six months to complete the investigation.
But the OSC already has secured records of five trading accounts of two Canadian brokerage firms that were opened by employees of Vucicevich's Kore International Management Inc. and several members of the Sulja family, whose Harrow-based lumber yard was incorporated in Ontario in 1987.
According to Anderson's affidavit, Vucicevich told RCMP investigators that he directed the trading in the five accounts to keep the price of the stock around 12 cents a share. The stock price has since dropped drastically to about one cent a share in U.S. trading Monday.
About 150 million shares of Sulja stock sold earlier this year through the five accounts raised about $7.8 million, Vucicevich told RCMP investigators the OSC affidavit says.
Money raised from the stock sale went to Kore or Sulja Bros. and members of the Sulja family, Vucicevich told the RCMP, according to the affidavit.
Vucicevich told The RCMP that he was directing Kore's operations in Canada through its Ontario-incorporated company while DeVries directed a U.S.-incorporated company also called Kore International, the affidavit says.
Vucicevich said the Kore companies controlled about 280 million Sulja stock shares, according to the affidavit.
The five trading accounts mentioned in the OSC affidavit were in the names of Pranab Pratap Shah and Tracey Banumas, both employees of Kore; and John Sulja, Samuel Sulja, and a joint account of Samuel and Vladko Sulja.
The OSC also received formal complaints in September from KPMG LLP and PricewaterhouseCoopers (PWC) that two Sulja Bros. news releases had falsely claimed the two accounting firms were being approached to do audits or handle other financial matters.
In his affidavit, Anderson says the accounting firms sent letters to Vucicevich and to Marquee Asset Management, an investor relations firm employed in the past by Sulja Bros. that requested corrections to its press releases, but nothing was publicly retracted.
Jim Bishop of Vancouver, who is well-known for expertise in penny stock markets, said he expects the OSC will share the results of its investigation with the U.S. Securities and Exchange Commission.
Based on the details of the OSC allegations and the extent of their investigation, Bishop predicted a gloomy outcome for shareholders of Sulja stock.
Vucicevich, who didn't appear, and his Kore company were represented Monday by Toronto lawyer Bryan Finlay. DeVries wasn't present or represented.
The Ontario Sulja Bros. company was represented by Toronto lawyer Kate Broer.
© The Windsor Star 2007
