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Portus's Manor Is Too Sick to Talk to Investigators, KPMG Says


Date: Tuesday, May 17, 2005
Author: Joe Schneider- Bloomberg.net

May 17 (Bloomberg) -- Boaz Manor, co-founder of Canadian hedge fund Portus Alternative Asset Management, is too sick to speak with investigators probing allegations of fraud at the fund, KPMG LLP said in a court filing.

KPMG, the world's fourth-biggest accounting firm, has been attempting to reach Manor since he fled Canada in April, after Ontario regulators froze the fund's assets.

In a May 9 letter to KPMG, Manor's lawyer asked for a three- to four-week delay in the interview because Manor was ``too ill to attend.'' As of today, KPMG was still demanding Manor's ``immediate cooperation,'' the court filing said.

Portus was founded by Manor and Michael Mendelson three years ago, becoming one of the fastest-growing hedge funds in Canada. The fund's customers had invested C$717 million ($567 million) as companies such as Manulife Financial Corp., referred their clients to the fund.

Manor had offered to pay KPMG's investigators' travel expenses if they agreed to interview him in Israel. KPMG rejected the offer April 28 and proposed to interview Manor in Amsterdam the week of May 9.

KPMG was appointed the fund's receiver by the Ontario Superior Court at the request of the Ontario Securities Commission. The OSC sued Portus over questionable transactions and seized all of its assets.

KMPG's investigation also found that Portus diverted C$3 million into a trust established to pay the legal expenses for officers and directors, after regulators ordered a freeze on the assets. The accounting firm had recovered C$910,000 of the C$3 million, it said.

Manor couldn't be reached for comment. Portus's Canadian offices are closed.


To contact the reporter on this story:
Joe Schneider in Toronto at  jschneider5@bloomberg.net