MMVF Twitter
Financing Solutions that Fit
This column doesn't normally deal with politics, but every so often an exception comes along.

Ontario's Parliament resumed its duties yesterday after the summer recess.
And prior to the reopening it would have been fascinating to have been a fly on the wall in the cabinet office.

Of special interest is the relationship between Greg Sorbara, the provincial Minister of Finance, and the Ontario Securities Commission, whose chairman is David Brown. When Sorbara was named Minister of Finance, the OSC was one of the groups that reported to him.

Over the past 10 months that relationship has been rocky for one reason:
Last December, Brown decided to give Sorbara a "heads- up" because the OSC was concerned about some activities at Royal Group Technologies, a TSX-listed company for which Sorbara served as a director.

Giving Sorbara a "heads-up" caused all sorts of bother for the just-elected minister. For starters, what was Sorbara supposed to do with the privileged information given that under OSC investigations, the person isn't allowed to tell anybody, even their significant other.

It's worth noting the stock market regulators -- read TSX/Regulation Services -- thought Royal Group didn't have to make a public disclosure that it was under investigation by the OSC.

The upshot is that two months passed before the information made its way into the public domain. (It became public just prior to Royal Group's annual

That's when the full impact of what Brown did came to bear.

The opposition parties wanted Sorbara's head. In time the government transferred responsibility for the OSC to Gerry Phillips, a senior minister with the title of chair of the management board. And the province's Integrity Commissioner, Coulter Osborne, investigated Sorbara's actions to see whether there was a conflict of interest.

Over the summer Osborne concluded Sorbara's actions were above board. "I am satisfied that no steps were taken by Mr. Sorbara, directly or indirectly, that would have had any effect on anything to do with the Royal matter. I am also satisfied that Mr. Sorbara did not influence or attempt to influence the OSC investigation of Royal during the time in which he was responsible for the OSC as Minister of Finance," he wrote.

Sorbara must have been very pleased when he read those words. But so far the government hasn't done anything with Osborne's conclusions.

One obvious step would be to return responsibility for the OSC back to the Minister of Finance.

Others argue that until the OSC announces that it has closed its file on Royal Group, Sorbara should not be given responsibility for the OSC. But despite an intensive study by Royal Group -- done for it by Kroll Inc. -- nothing untoward has been found. Meanwhile the OSC leaves Royal Group hanging.

Maybe the government is waiting until next week to make its views known.

On Monday the province's house standing committee on finance and economic affairs reports on the OSC. The report is the result of hearings held during the summer. During those sessions, a report from Osborne concluded that an adjudication tribunal -- that's separate from the OSC -- should be brought in. David Brown has rejected that recommendation.

- - -

Six years back when it was formed it was known as MM Venture Partners. Over that time, the Toronto-based firm invested about $160-million in more than 40 companies within the technology and life sciences sectors.

Over the summer MM Venture Partners became MMV Financial, which has since had raised $300-million to invest. MMV emerged after Brian Hendry, Minhas Mohamed and Ron Patterson -- the three principals -- purchased the stake in MM held by GATX. The Caisse, Conning Capital Partners and Wells Fargo Foothill were some of the investors in the new fund that seeks to spend $50-million to $60-million a year in 15 to 20 companies.

And now MMV Financial has made its first investment: it provided US$2.25-million in debt financing to Nakina Systems Inc., an Ottawa-based software company.

The debt provided to Nakina isn't the normal garden variety -- MMV will receive a fixed rate of return plus the upside that flows from receiving an equity warrant.

"We are set to close two others in the next few weeks," said Mohamed.

MMV :: 370 King Street West, Suite 442 Toronto ON M5V 1J9 Canada