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Tuesday, March 26, 2019

New allegations filed against Portus co-founder


Date: Saturday, September 3, 2005
Author: PAUL WALDIE- Globe & Mail

The saga surrounding embattled hedge fund company Portus Alternative Asset Management Inc. has taken another bizarre twist with allegations company co-founder Boaz Manor used nearly $12-million (U.S.) of investor money to buy precious stones or metals.

Mr. Manor also allegedly directed the transfer of $8.6-million of client money into several Hong Kong bank accounts just a few weeks ago.

The revelations are contained in a report filed in court yesterday by KPMG LLP, the court-appointed receiver for the insolvent company.

Toronto-based Portus was forced into receivership last March by the Ontario Securities Commission, and KPMG has been trying to recover about $800-million (Canadian) in assets. The RCMP has also launched a criminal investigation.

Mr. Manor left for Israel shortly after an Ontario court ordered him to co-operate with KPMG. The court also ordered him to return $3.1-million (U.S.) he allegedly misappropriated and account for a further $17.6-million that is missing.

In yesterday's report, KPMG said it has been told by Mr. Manor's lawyer in Israel that $11.6-million of that money was used to purchase "precious metals -- precious stones." The lawyer also indicated that Mr. Manor is eager to co-operate with KPMG but his health has deteriorated and he may need hospitalization.

KPMG said it has asked Mr. Manor to return any stones that have been purchased. The receiver also indicated that he has yet to repay the $3.1-million or account for the remainder. KPMG said it is also skeptical about Mr. Manor's health claims and added that "it has become increasingly obvious that Manor has no intention to submit to an examination or return the investor funds or other Portus assets under his control." KPMG has gone to court in Israel to force Mr. Manor to comply with the Ontario order.

The report also alleged that Mr. Manor directed the transfer of $8.6-million to accounts in Hong Kong from banks in Switzerland despite court orders requiring him to return all investor money to the receiver. Some of the Hong Kong accounts belong to a company involved in diamond trading, the report said. The receiver has also uncovered other alleged transfers involving bank accounts and entities in several Caribbean countries and across Europe.