VANCOUVER – The British Columbia Securities Commission is alleging two sisters committed fraud by misappropriating funds from a joint venture and by transferring shares of the venture without consideration to the benefit of their adult children.
The commission says it will seek to set a hearing date June 25 on the allegations against Siu Mui (Debbie) Wong and Siu Kon (Bonnie) Soo.
The allegations, which have not been proven, involve a joint venture with an Alberta company the sisters co-founded called Wheatland Industrial Park Inc.
The regulator claims at least 78 individuals and companies bought $85,000 shares in the venture, for which a prospectus was never issued in British Columbia even though the shares were promoted in that province.
For approximately 25 of the purchasers —totalling $2 million in shares — there was no applicable exemption to prospectus requirements.
It is that amount that the commission is concerned with, an official said in an email, adding that to date the BCSC is unaware of any realized losses by investors.
The goal of the venture was to divide a property owned by Wheatland into individual swaths of industrial land, then sell them to bring in money for investors and the company.
The venture authorized the sisters, who were the sole directors of Wheatland, to co-ordinate the development and re-sale of the property, and entitled them to five per cent of the profits.
However, unknown to investors, the sisters allegedly took $5.2 million of the money raised and lent it to themselves and their various companies, although the money was later paid back.
The regulator also claims they transferred roughly $2.8 million worth of shares in the joint venture to companies owned by their adult children without the knowledge or permission of the investors.
The securities commission says Wong and Soo have agreed to pay the money owing to Wheatland plus interest by July 31.
Meanwhile, Wheatland has defaulted on the mortgage for parts of its property and foreclosure proceedings have begun.