This column doesn't normally deal with politics, but every so often an exception
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
"We are set to close two others in the next few weeks," said Mohamed.