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Desmarais delays plan to join board of troubled Performance Sports due to probes

TORONTO – Power Corporation of Canada’s Paul Desmarais III is delaying plans to take a more activist role in the Bauer hockey equipment business, citing investigations into the financial statements of Performance Sports Group (TSX:PSG).

The announcement was made by Power subsidiary Sagard Capital Partners of Greenwich, Conn., which has recently become largest shareholder in PSG — owner of various sports equipment brands including Bauer and Easton.

Desmarais is a member of one of Canada’s wealthiest families, which controls vast financial holdings including Great-West Lifeco and IGM Financial — publicly traded international insurance and wealth management firms based in Winnipeg.

Among other positions, Desmarais is chairman of Sagard Capital and Wealthsimple. He’s also vice-president of Montreal-based Power Corp. (TSX:POW) — the family’s main company — where his father Paul Desmarais Jr. is co-CEO and chairman.

Sagard currently owns 16.9 per cent of the shares of Performance Sports Group (TSX:PSG), following a series of investments this year.

The investment company currently doesn’t have a representative on PSG’s board but has taken steps to appoint a director and take an activist role in its affairs.

In March, Sagard announced the purchase of nearly two million PSG shares at an average price of US$3.35 per share, or C$4.43. At the time, it said the company would nominate at least one director of Performance Sports.

The stock has plummeted this week following a series of revelations, including that PSG and the Securities and Exchange Commission are investigating unspecified problems with its financial statements and the delay of audited financial results.

PSG shares closed Wednesday at C$2.30 in Toronto and US$1.83 in New York.