A cease-trade order filed against a prominent Toronto businessman who bills himself as "the Chinese Warren Buffett" will stay in place until September.The order, which also freezes bank accounts belonging to Weizhen Tang, his companies and his Oversea China Fund, was extended until Sept. 10 during a brief hearing at the Ontario Securities Commission yesterday.
The hearing comes one week after the OSC first raised allegations that Tang may have been operating a Ponzi scheme involving some $60 million (U.S.).
Tang did not attend yesterday's proceedings, which drew many reporters but just a handful of investors.
"It is by no means a simple investigation," OSC lawyer Hugh Craig told commissioner Lawrence Ritchie in asking for the extension on the original cease-trade order.
Tang's lawyer, Hugh Lissaman, said his client did not oppose the move. "My client has always indicated he is prepared to co-operate with the OSC," he said.
Asked about the Ponzi scheme allegations, Lissaman told reporters after the hearing, "All I can tell is, at this time, they are allegations put forward in a document filed with the court. There have been no formal charges laid against my client."
The Ontario Securities Commission issued the freeze orders against Tang and his companies, Weizhen Tang Corp., and Weizhen Tang and Associates Inc., last week.
The OSC believes there are at least 200 investors who put about $68 million in Tang's Oversea China Fund. To date, about $35 million has been paid out, according to documents the commission filed in provincial court last week.
Tang reportedly told investors that "new investor money is being paid out to old investors," and that "there was no money left at this time in Oversea," according to the documents.
He also told OSC investigators that the fund lost $15 million in 2007, but he did not disclose that loss to investors.
Tang promised investors a weekly return of 1 per cent.
Some investors remain loyal to the businessman. A letter opposing the cease-trade order, signed by more than 100 Toronto clients, was delivered to the OSC yesterday.
"As long as Tang's trading is under supervision and follows the law, he should not be banned from trading. This will cause further damage to the investors and defy public interests," says the letter, published in Chinese on a popular breaking-news website.
"The majority of the investors, being overseas Chinese and minorities in Canada, when dealing with non-violent dispute, should resolve the issues internally."
Other investors have approached Toronto police, though no charges have been laid.
A retired doctor from Chengdu, who gave his name as Mr. Niu, was among five Tang clients at yesterday's hearing. The Toronto man said he invested $100,000 with Tang in 2002 and hasn't withdrawn a penny since. "I have lost all my savings. I just feel so stupid. I can't blame anyone but myself. I just hope he could continue to work and get our money back," he said.
A Ponzi scheme involves paying "profits" to early investors by using money from new investors.
The OSC is asking investors with any information to call 416-593-8314.
Posts
0 comments:
Post a Comment