Wednesday, October 12, 2005

Sorbara Out

Ontario Finance Minister Greg Sorbara has resigned because he's currently under investigation for fraud allegedly committed while he was a director of Royal Group Technologies:

Mr. Sorbara was initially defiant in the face of calls for his resignation, saying he had no intention of stepping down.

"I can tell you clearly and unequivocally, I am not involved in the investigation," he told reporters yesterday afternoon. "Over the past 18 months, I have never been contacted by the RCMP."

He repeatedly said he is "simply not involved in the investigation" even though the search warrants specifically cite his name in connection with the allegations.

He said he found out about the search warrant yesterday morning when someone from Sorbara Group left him a voice message but that he had not seen the document.


The allegedly fraudulent acts were in connection with a series of so-called related party deals between Royal Group and private companies owned by (founder Vic) De Zen and other officials.

In November, 2004, Royal Group dismissed Mr. De Zen as chairman and removed two other top executives after an internal probe by forensic accountants Kroll Lindquist Avey revealed they earned $6.5-million on a related-party transaction six years earlier.

A summary of a final report by Kroll, released last March by Royal Group, concluded that Mr. De Zen and the others were involved in more than 20 related-party transactions dating back to 1996.

Royal Group did not disclose details of the transactions, including whether the Sorbara Group was involved in one of them. Yesterday, company spokesman Richard Wertheim said Royal Group has made all material disclosures and had nothing further to add.

The search warrant on the Sorbara Group (actually a subsidiary called Sam-Sor Enterprises Inc.) mentions two property deals in Brampton that took place in 1996 and 1997.

So much for the Liberal strategy of repeated denials in the face of overwhelming evidence. Having an alleged crook in charge of the books is going to hang around Dalton McGuinty's neck like an albatross for a long time to come. The most controversial claim out of the Ministry of Finance--the $23 billion annual fiscal imbalance between what Ontario taxpayers pay out and get back from Ontario and the looming threat of have-not status--is going to look politically suspect.

Let's see if Dwight Duncan can do a better job.

Source: Globe and Mail

1 comment:

James said...

Here is an interesting 1990 article on Greg Sorbara and how he found away around his own government's law to give his residential tenants huge rent increases when he was the Liberal labour minister.