Couple owing $19 million to BCSC must stay in bankruptcy, rules court

Provincial arbitrator denies couple’s request as they must face ‘fiscal consequences’ of past violations

Couple owing $19 million to BCSC must stay in bankruptcy, rules court

A BC couple’s request to be discharged from their bankruptcy has been denied by the province’s supreme court, which cited past violations for which they owe the British Columbia Securities Commission millions of dollars.

In 2015, a BCSC panel found that Thalbinder Singh Poonian and Shailu Poonian inflated the share price of OSE Corp., an Ontario-based company that was listed on the TSX Venture Exchange, through back-and-forth trading among themselves and relatives, friends, and acquaintances. After manipulating the prices, they sold OSE shares to unsuspecting buyers, illegally obtaining some $7 million in the process.

The Poonians were ordered to pay a total of $13.5 million in administrative penalties, plus a combined $5.5 million disgorgement of their ill-gotten gains. The couple are currently in bankruptcy, though they have not paid any portion of the sanctions.

In a petition to the BC Supreme Court, the Poonians asked that they be allowed to exit the bankruptcy process, characterizing themselves as “honest but unfortunate debtors” whose debts were beyond their ability to pay.

But the BCSC, along with Canada’s Minister of National Revenue, argued that a discharge would have eliminated the financial sanctions they owe to the BCSC, as well as the tax arrears, interest, and penalties they owe to the Canada Revenue Agency. Funds paid to satisfy the $5.5-million disgorgement order, the BCSC stressed, would go to investors who suffered financial losses because of the Poonians’ scheme.

In his ruling against the couple, BC Supreme Court Master Bruce Elwood noted that Canada’s bankruptcy laws are not there “to cleanse those who contravene the Securities Act of the fiscal consequences of their actions.”

Citing “considerable doubt in this case whether the Poonians have been rehabilitated,” he said that through their own evidence, they have shown their refusal “to take responsibility for their actions or the consequences of those actions for others.”


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