The Autorité des marchés financiers is seeking to wind up troubled fund company, Norbourg Asset Management Inc., amid allegations that $130 million in missing from the firm’s funds.

The AMF launched proceedings this morning to request that the Bureau de décision et de révision en valeurs mobilières make a recommendation to Québec’s Minister of Finance to wind up the Norbourg group. The request follows the filing of a provisional report by Ernst & Young, which was appointed to administer Norbourg after trouble was revealed in the firm’s financials.

In its report, Ernst & Young found a $130 million discrepancy between Norbourg’s financial statements for July 31, which claimed assets under management of $205 million, but it found only $75 million was held in custody. It also reported that 17 of the 29 funds in the Norbourg group held balances of less than $300,000. According to the report, the number of unitholders in the Norbourg group totaled 9,200.

The firm also discovered that the main companies in the Norbourg group were operating at a deficit. For these reasons, it recommended the winding-up of the Norbourg group.

The AMF also said that, because of the seriousness of the situation, it has decided to pursue recovery on behalf of the investors. Based on the information it has gathered, the AMF’s resources and expertise will therefore be available to investors for the recovery of funds, it reports.

The AMF is also pursuing its investigation to determine whether to launch penal proceedings. Because of the substance of the allegations, the AMF is also co-operating with the Integrated Market Enforcement Team of Montréal, which has undertaken a criminal investigation in this case. At this point, no formal allegations have been made, and nothing has been proven.