The Ontario Securities Commission (OSC) will hold a hearing to consider an application that seeks to have a public company regulated as an investment fund.
The OSC said it will hold a hearing on Sept. 25 to consider an application from Epix Resource Finance Corp., which is asking the commission to order that a TSX Venture Exchange–listed company, Aberdeen International Inc., appoint an independent review committee (IRC) as investment funds are required to do, and that the OSC instruct the IRC to report on “all conflict of interest matters” involving the firm.
According to the application from Epix, which is a shareholder in Aberdeen, the company operates in a way that meets the definition of a “non-redeemable investment fund” but isn’t complying with the applicable rules.
The allegations haven’t been proven.
According to the application, Aberdeen invests in small-cap mining companies, many of which have dealings with related companies that give rise to conflicts of interest.
Ultimately, Epix argues that Aberdeen’s strategy means that it’s “structured as a non-compliant publicly traded non-redeemable investment fund.”
“Because Aberdeen does not recognize itself as a non-redeemable investment fund, it deems the numerous related party transactions between insiders and its public investee companies to be permissible when they ought not to be,” the application argued.
It maintained that the relief sought at the hearing would bring Aberdeen “into compliance with Ontario securities law […].”
At the same time, the application also revealed that Epix’s controlling shareholder, Michael Sheridan, is involved in litigation reportedly being funded by Aberdeen.
“Although Mr. Sheridan (and, indirectly, Epix) has an interest in the outcome of the […] litigation, this application is much broader in scope, has been brought in good faith and gives rise to an important ongoing issue concerning Aberdeen that engages the commission’s public interest jurisdiction,” the application said.