MONTREAL — The Caisse de depot et placement du Quebec has fired four senior executives, including the chairman and chief executive of its mortgage financing subsidiary Otera Capital following an in-depth internal investigation of ethical breaches.
The investigation confirms that the actions of subsidiary president Alfonso Graceffa, economist Edmondo Marandola and vice-president Martine Gaudreault were not appropriate but not interconnected. The fourth person has not been identified.
The Journal de Montreal revealed irregularities in February, including that Graceffa obtained 11 loans totalling more than $9 million from an Otera subsidiary to finance income properties he owned. It also revealed that Marandola was moonlighting as a real estate developer and that Gaudreault and her husband, Alain Cormier, were in business together and that Cormier had business ties with the Rizutto Mafia clan.
Caisse president Michael Sabia says he’s reassured by the fact that “no misuse of funds” was found and that Otera’s portfolio has retained its integrity. But he acknowledged that the ethical shortcomings of a few people is “shocking” and “unacceptable.”
The investigation cost $5 million and involved 120 people, including a team of specialized lawyers, forensic accountants, criminal intelligence experts and other experts in economic intelligence specialized in money laundering issues.
The Caisse restructured Otera by splitting the roles of board chairman and chief executive, formerly occupied by Graceffa, appointing the head of risk and affiliate relations as chairman, naming Rana Ghorayeb as CEO and renewing other members of the board.
Quebec Premier Francois Legault says he’s satisfied by the Caisse response to the investigation, adding that the irregularities were an exception for the Quebec pension fund manager. Opposition parties were more critical, saying it minimizes the scale of the problems.
The Canadian Press