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Fox Guarding the Hen House

   

Berkshire asks for clients' trust
Lawsuits against former advisor prompts personal letter from chairman

 

Andrew A. Duffy
 

Thursday, August 11, 2005

In an effort to reassure clients amid growing publicity over the Ian Thow bankruptcy case, Berkshire Securities chairman Michael Lee- Chin has sent a letter urging investors to trust in the company.

The two-page letter, sent to clients by their Berkshire advisors last week, makes no mention of Thow, a former senior investment adviser, but reminds investors how transactions with the company ought to take place.

Lee-Chin also explains Berkshire clients should be getting detailed confirmation of all transactions and regular statements detailing activity on their accounts.

Thow, who left the company at the end of May, faces a number of lawsuits stemming from an investment scheme involving the National Commercial Bank of Jamaica.

Clients involved in the scheme allegedly wrote cheques to Thow or his company to purchase shares on their behalf, with little or no documentation.

Some of those lawsuits name Berkshire as a co-defendant. The National Commercial Bank of Jamaica is 75 per cent owned by AIC Ltd., the parent company of Berkshire.

In response to an interview request, Frank Laferriere, chief operating officer for Berkshire Investment Group, faxed a statement to the Times Colonist reiterating that Berkshire was neither involved in nor aware of the alleged transactions attributed to Thow.

Laferriere said Thow was not licensed or authorized to sell shares in the National Commercial Bank of Jamaica and had no business relationship with Lee-Chin in relation to the bank.

"There was never any 'limited opportunity available only to Berkshire clients' to purchase NCB shares as has been alleged," wrote Laferriere. "NCB's shares are publicly traded through the Jamaica Stock Exchange. Investors may purchase these shares through a duly licensed broker in Jamaica.

"We are also not aware of any NCB shares being owned by Mr. Thow at any time."

Laferriere also said that cheques should never be made payable to an individual such as a financial adviser.

"Client cheques payable to Berkshire are credited to and reflected on the client's official Berkshire account statements," he wrote. "On those account statements, clients are asked to notify Berkshire's head office if there are any discrepancies. None of Mr. Thow's clients notified Berkshire's head office of any discrepancies regarding cash deposits [cheques] to their accounts."

Attempts to contact Thow through his Vancouver-based lawyer Rod Anderson were unsuccessful.

Thow has filed a notice of his intention to make a proposal to his creditors -- more than 50 individuals, banks and companies claiming nearly $30 million -- under the Bankruptcy Act.

aduffy@tc.canwest.com