Thursday, June 30, 2005
For the past seven years, until recently, Ian Thow has been a fixture in
the Victoria offices of Berkshire Investment Group Inc. Along the way, he
made himself some friends -- but judging from the response to yesterday's
column, which dealt with his sudden departure from the firm, he also made
himself a lot of enemies.
And those enemies, a number of whom used to be clients and/or business
partners, have taken to the courts for redress.
Here is a summary of three recently filed suits. (A fourth claim, for
$1-million, was due to be filed last night. The speculation is that the
losses could total $30-million.) Those suits -- filed against Berkshire,
Thow and AYG Investments and 657594 B.C. Ltd., two of Thow's private
companies -- have two common themes:
missing monies; and
investments made in the equity capital of
National Commercial Bank of Jamaica, a bank close to the heart of
Michael Lee-Chin, founder of the AIC Group of Funds. In turn, AIC and/or
Lee Chin is the controlling shareholder of Berkshire.
THE GOODWIN GROUP
On June 15, this group filed a statement of claim against Berkshire, Thow
and AYG seeking at least $1.5-million. That group has been clients of Thow
since 2003, when Thow advised the four plaintiffs to invest in the shares
of National Commercial Bank. "
According to the statement, Thow advised the plaintiffs "this was a
limited opportunity only available to clients of Berkshire."
But there was a catch. "In order to participate in the investment, Thow
advised that the funds must be transferred to him personally or to his
holding company, AYG, and he would purchase the shares to be held in trust
on behalf of the plaintiffs."
The plaintiffs invested almost $2.5-million in the investment scheme. "The
funds invested in the investment scheme have earned a substantial profit,
particulars of which are known to the defendants but not the plaintiffs,"
said the statement of claim.
The plaintiffs have received some of their investment plus accrued
profits. But the group is still owed $1.052-million plus accrued profits.
"By reason of his conduct, Thow and AYG have converted the plaintiffs'
funds to their own use and have wrongfully deprived the plaintiffs of the
same," said the statement of claim.
The group claims that earlier this month, Thow entered an agreement with
the plaintiffs to repay $1.480-million, plus US$6,447 plus interest at 15%
per annum on the unpaid balance. But "Thow has neglected and/or refused to
make the payments as agreed," said the statement.
THE STIMSON GROUP
Earlier this month, this group filed a statement of claim in Alberta
seeking the return of US$200,000. The Stimsons gave Thow -- specifically
his holding company 657594 B.C. Ltd. -- US$200,000 in spring 2004. "It was
agreed that the plaintiffs would invest the total sum of US$200,000 in the
National Commercial Bank of Jamaica," said the statement of claim.
"The plaintiffs have repeatedly sought to recover the investment from Thow
and were consistently promised repayment but the same has not been
forthcoming," the statement added. Recently the plaintiffs were advised
that "recovery of their investment will not be forthcoming."
A businessman based in Nanaimo, B.C., Thomson met Thow in summer 2002 and,
according to the statement of claim, based on representations made by
Berkshire and Thow, agreed to "place his trust and confidence in the
defendants Berkshire and Thow and he relied upon the skill, expertise and
judgment of these defendants."
In September, 2003, Thomson was presented with an opportunity to invest in
preferred shares of National Commercial Bank of Jamaica. "The defendant
Thow informed the plaintiff that an investment in the bank was financially
secure and profitable investment, that the investment was supported by the
president of Berkshire, Michael Lee-Chin, who was personally investing in
the bank, along with other senior employees of Berkshire."
Thomson invested $736,000 and has received $50,000. He is seeking the
balance plus an accounting of the investment plus interest.
- - -
Thow was a high-liver. One lawyer involving with one of the plaintiffs
said that since 2002, Thow had registered loans on at least 11 cars,
including two 2005 SL65 Mercedes; a 2004 Ford S 350; a 2004 Ford
Expedition; a 2004 SL600R Mercedes; a 2003 Cadillac Escalade; a 2003
Chevrolet Corvette; a 2003 SL500 Mercedes; a 2002 Cadillac Escalade; a
2002 Porsche Boxter; and a 2002 Ford Windstar. He lives in a $4.5-million
home on West Saanich Road, an upscale part of Victoria and has at least
two executive aircraft.
It is not known whether Thow made good on his pledge to donate $500,000 to
the Greater Victoria Hospitals Foundation. Calls made to Melanie McKenzie,
the foundation's executive director, drew this response. "Unfortunately we
can't give you that information. We respect the privacy of our donors. I
can't confirm whether he has given zero."