Evidence of meeting #13 for Government Operations and Estimates in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was company.
A recording is available from Parliament.
4:50 p.m.
Chief Executive Officer, International Strategic Investments
Does that mean everybody around the table is peddling influence?
4:50 p.m.
Chief Executive Officer, International Strategic Investments
Well, that's what I'm asking you. I'm saying, if I met you--
4:50 p.m.
NDP
Pat Martin NDP Winnipeg Centre, MB
But I'm wondering, what did you have him there for? Why did you need him as a business partner?
4:50 p.m.
Chief Executive Officer, International Strategic Investments
As a business person, if it's not going to cost you any more to expand your network, you do it. It makes sense. Common sense business says that if you have a guy out there who's willing to go out and help you move forward your objective, you take that if it's not going to cost you any money.
4:50 p.m.
NDP
Pat Martin NDP Winnipeg Centre, MB
All right, fair enough. I'm not going to argue with you.
In your contract with him, it says, “On a project-to-project basis, the parties” will agree to a “fee/profit-sharing” arrangement as a reward, as a fee.
4:50 p.m.
NDP
Pat Martin NDP Winnipeg Centre, MB
Would that profit-sharing arrangement sometimes include taking shares or stocks or an equity position in the company they're helping to develop?
4:50 p.m.
Chief Executive Officer, International Strategic Investments
It depends, on a project-by-project basis, and again, we're totally subject to the funder. One of the reasons we leave this type of language in an agreement like this—and I know it's sort of wishy-washy and not very clear—is that it gives us the ability to be able to take the funder's requirements and turn around and taper a deal that makes sense based on that.
4:50 p.m.
NDP
Pat Martin NDP Winnipeg Centre, MB
Let me put to you a scenario that has been put to us by people who claim to have some knowledge of your relationship.
4:50 p.m.
NDP
Pat Martin NDP Winnipeg Centre, MB
Rahim secures the government grant; the company puts out an IPO; the offering goes out; Rahim gets shares; you pump up the value of those shares, using in part the fact that you got this government grant, and therefore the company is credible. Rahim sells off his shares at the high; you short those and get it down lower; he buys back in at the lower level and his profit is the spread he enjoys between where he sold it off and where he buys back in. Is that a realistic scenario?
4:50 p.m.
Chief Executive Officer, International Strategic Investments
Yes, that's a strategy that's used every day, but--
4:50 p.m.
Chief Executive Officer, International Strategic Investments
No, not at all.
4:50 p.m.
Chief Executive Officer, International Strategic Investments
Going long and going short is a standard strategy in the market, right? It's a standard strategy.
4:50 p.m.
Chief Executive Officer, International Strategic Investments
It's not what you call “pump and dump”.
4:50 p.m.
Chief Executive Officer, International Strategic Investments
A going short strategy is based on the ability to hope that a stock goes down in value and—
4:50 p.m.
NDP
Pat Martin NDP Winnipeg Centre, MB
But what does that say to those people who you asked to buy in at the higher rate if all along you intended to short it?
4:50 p.m.
Chief Executive Officer, International Strategic Investments
I never asked anybody to buy into anything. I don't ask anybody to buy in at any rate when the company is public. I don't work--
4:50 p.m.
NDP
Pat Martin NDP Winnipeg Centre, MB
Well, the IPO is well before it goes public, the initial price offering.
4:50 p.m.
Chief Executive Officer, International Strategic Investments
We take our money and we invest it just like everybody else—my money, our company's money, just like everybody else—but we invest in the private corporation before it goes public.