Settlements

JAMES TERRENCE ALEXANDER [Sec. 161 & Agreed Stmt]

BCSECCOM #:
Document Type:
Sec. 161 & Agreed Stmt
Effective Date:
1999-02-23
Details:


IN THE MATTER OF THE SECURITIES ACT
R.S.B.C. 1996, c. 418

AND

IN THE MATTER OF JAMES TERRENCE ALEXANDER

Order Under Section 161

WHEREAS an Agreed Statement of Facts and Undertaking has been executed by James Terrence Alexander (“Alexander”) and the Executive Director, a copy of which is attached hereto as Schedule “A” (the “Agreement”);

NOW THEREFORE the Executive Director, considering that it would be in the public interest to do so, orders, BY CONSENT, that:

1. Under section 161(1) (c) of the Securities Act, R.S.B.C. 1996, c. 418 (the “Act”), the exemptions described in sections 44 to 47, 74, 75, 98 and 99 of the Act do not apply to Alexander or to JT Alexander and Associates Holding Corporation for a period of 20 years from the date of this Order;:
      a) except that Alexander may trade securities beneficially owned by him or JT Alexander and Associates Holding Corporation at the date of the Order, subject to the following conditions:
          i) that before any trades take place, Alexander must deliver a sworn declaration to the Executive Director listing all of the securities beneficially owned by him or JT Alexander and Associates Holding Corporation at the date of this Order;

          ii) that any such trade must take place within one year of the date of the Order through a single registered dealer designated in writing by Alexander and approved by the Executive Director;

          iii) that before any such trades take place, Alexander must deliver to the registered dealer a copy of this Order;

          iv) that Alexander will instruct his registered dealer to provide the Executive Director with a copy of the confirmation slip evidencing the trade within four days of the date of the trade;
2. Under subsection 161 (d) of the Act, that Alexander resign any position Alexander holds as a director or officer of any issuer and is prohibited from becoming or acting as a director or officer of any issuer for a period of 20 years from the date of this Order;

3. Under section 161 (1) (d) (iii) of the Act, Alexander is prohibited from engaging in investor relations activities for a period of 20 years from the date of this Order.

    DATED at Vancouver, British Columbia, February 23, 1999.





    Michael J. Watson
    Executive Director



    “Schedule A”

    IN THE MATTER OF THE SECURITIES ACT
    R.S.B.C. 1996, c. 418

    AND

    IN THE MATTER OF JAMES TERRENCE ALEXANDER

    Agreed Statement of Facts and Undertaking


    The following agreement has been reached between James Terrence Alexander (“Alexander”) and the Executive Director:

    1 As the basis for the orders and undertakings referred to in paragraph 2, Alexander makes the following representations and admissions:
        1.1 Arakis Energy Corporation (“Arakis”) is a reporting issuer incorporated under the Company Act, R.S.B.C. 1996, c. 62 (the “Company Act”), the common shares of which were listed on the Vancouver Stock Exchange (the “Exchange”) until August 24, 1995, and have been quoted for trading on The NASDAQ Stock Market (“NASDAQ”) since June 10, 1993;

        1.2 Alexander was a director of Arakis from October 28, 1988, President and Chief Executive Officer of Arakis from June 5, 1990, and Chairman of Arakis from November 1, 1994, until Alexander resigned these positions effective December 1, 1995;

        1.3 State Petroleum Corporation (“State”) is a non-reporting issuer incorporated under the Company Act;

        1.4 the Archmont Trust was a Jersey trust, settled by Alexander in or about 1991, administered through Integro Trust (Jersey) Ltd. (“Integro”) (formerly RYCO Trust Management Services Limited);

        1.5 Chatel International Limited (“Chatel”), Hatfield Investments Limited (“Hatfield”), Glenvally Associates Limited (“Glenvally”), Central Finance Limited (“Central Finance”), Victoria Finance Limited (“Victoria”), Princely Limited (“Princely”) and Archmont Holding Ltd. (“Archmont”) are corporations which were at all material times wholly-owned subsidiaries of the Archmont Trust;

        1.6 at all material times, Alexander had control and direction, for the purposes of sections 86 and 87 of the Securities Act, R.S.B.C. 1996 c. 418 (the “Act”) and sections 68 and 70 of the Securities Act, S.B.C. 1985, c. 83 (the “Prior Act”), over the securities of Arakis held from time to time by Chatel, Hatfield, Princely and Archmont;

        1.7 Anthem International Incorporated (“Anthem”) is a company incorporated in the British Virgin Islands;

        1.8 at all material times, Alexander had control and direction, for the purposes of sections 86 and 87 of the Act and sections 68 and 70 of the Prior Act, over the securities of Arakis held from time to time by Anthem;
        The Anthem Distribution
        1.9 on or about June 26, 1992, Alexander caused Arakis to enter into an agreement with State whereby, upon State acquiring certain oil and gas concessions located in the Republic of the Sudan (the “Project”), Arakis would acquire all of the issued and outstanding shares of State in exchange for five million common shares of Arakis (the “Purchase Agreement”);

        1.10 at the time the Purchase Agreement was executed, the shareholders of State were Lutfur Khan, Dr. Asif Ali Syed, Nadeem Khan, Waseem Rahman (Pvt.) Ltd. and Westrim Enterprises Ltd. (collectively, the “Original State Shareholders”);

        1.11 in January 1994, prior to the acquisition of State by Arakis, Alexander proposed to State and the Original State Shareholders that Anthem become an additional shareholder of State. Alexander also proposed to State and the Original State Shareholders that the Purchase Agreement be revised such that Arakis would acquire State in consideration of the issuance of six million common shares of Arakis, with the additional one million shares being issued in favour of Anthem;

        1.12 on or about January 25, 1994, Arakis and State, in fact, entered into an agreement pursuant to which the shareholders of State would receive a total of six million common shares of Arakis in exchange for all of the outstanding shares of State (the “Revised Purchase Agreement”). No consideration additional to that contemplated by the Purchase Agreement was provided by either State or the Original State Shareholders under the Revised Purchase Agreement;

        1.13 the acquisition of State by Arakis was concluded in or about April 1994, and five million common shares of Arakis were issued to the Original State Shareholders and one million common shares were issued in favour of Anthem;

        1.14 pursuant to an Escrow Agreement dated April 25, 1994, three million of the shares were issued immediately (and proportionately to the Original State Shareholders and Anthem), one and one half million were to be released upon Arakis completing a US$28 million financing and the remaining one and one half million upon Arakis raising a further US$100 million in financing;

        1.15 Anthem, at the time that the Arakis shares were issued to it, had not provided full consideration for its shares either in State or Arakis, in cash, property or services;

        1.16 the issuance to Anthem of the additional one million shares of Arakis was contrary to section 43 of the Company Act;

        1.17 on or about April 29, 1994, Alexander caused Arakis to issue a press release, disclosing the acquisition of State and the issuance of the six million shares, which Alexander knew or ought to have known omitted to disclose both the fact that Anthem had not provided full consideration for the shares issued to it and the fact that Alexander had control or direction over the shares in Arakis issued to Anthem contrary to section 85 of the Act;
        The Archmont - Princely Placement
        1.18 on or about April 5, 1993, Arakis issued 386,433 common shares and share purchase warrants by way of private placement to each of Archmont and Princely at a price of US$3.83 per unit (the “Archmont - Princely Placement”);

        1.19 Alexander caused Arakis to fail to issue and file a news release and material change report disclosing the nature and extent of his relationship with Archmont and Princely or the fact that Alexander would have control and direction over the securities of Arakis issued to Archmont and Princely, contrary to section 85 of the Act;

        1.20 on or about March 17, 1994, Alexander caused the shares, including those issued pursuant to the warrants, issued to Princely (a total of 772,866 shares) and a total of 742,866 shares issued to Archmont to be deposited into a brokerage account in the name of Hatfield at Haywood Securities Inc. (“Haywood”). Alexander subsequently caused the 742,866 shares issued to Archmont to be transferred to a Haywood account held by Chatel;

        1.21 between April 1994 and July 1, 1995, the common shares of Arakis issued to Archmont and the common shares of Arakis issued to Princely were sold into the market through available stock exchange facilities;
        The Chatel Placement
        1.22 on or about March 29, 1994, Arakis issued 500,000 of its common shares and share purchase warrants by way of private placement to Chatel at a price of $8.08 per unit (the “Chatel Placement”);

        1.23 Alexander caused Arakis to fail to issue and file a news release and material change report disclosing the nature and extent of his relationship with Chatel or the fact that Alexander would have control and direction over the securities of Arakis issued to Chatel, contrary to section 85 of the Act;

        1.24 between February 13, 1995 and March 6, 1995, the Arakis shares issued under the Chatel Placement were sold and, further, on or about February 16, 1995, Chatel exercised 500,000 warrants, and, of the 500,000 shares issued as a result of the exercise of warrants, all were sold into the market through available stock exchange facilities between the date of exercise and March 6,1995;
        The Hatfield Placement
        1.25 on or about September 22, 1994, Arakis issued 500,000 of its common shares and share purchase warrants by way of private placement to Hatfield at a price of $5.10 per unit (the “Hatfield Placement”);

        1.26 Alexander caused Arakis to fail to issue and file a news release and material change report disclosing the nature and extent of his relationship with Hatfield or the fact that Alexander would have control and direction over the securities of Arakis issued to Hatfield, contrary to section 85 of the Act;

        1.27 on or about March 22, 1995, the Arakis shares issued under the Hatfield account were deposited into a Hatfield account maintained at Haywood. The shares were sold, through available stock exchange facilities, on or about April 17, 1995;

        The Verwaltungs Placement
        1.28 on or about August 22, 1994, Arakis announced that it had entered into a private placement agreement with Verwaltungs-und-Privat Bank AG (“Verwaltungs”). The placement agreement was for 1,200,000 units at a price of $5.31 per unit, for a total subscription price of $6,372,000. Notice of the private placement was provided to the Exchange on or about August 30, 1994;

        1.29 on or about August 31, 1994, Alexander caused $5,000,000 to be paid from a Haywood account in the name of Chatel to a Haywood account in the name of Verwaltungs. The said $5,000,000 was transferred against the deposit to the aforesaid Chatel account of 500,000 of the Arakis shares issued to Anthem as part of the Revised Purchase Agreement;

        1.30 the $5,000,000 paid to Verwaltungs was subsequently used by Verwaltungs to pay Arakis for a portion of the subscription price owed pursuant to the private placement agreement;

        1.31 the issuance of the Anthem shares and their subsequent use to facilitate the Verwaltungs private placement constituted the giving of financial assistance by Arakis for the subscription for its securities, contrary to section 103 of the Company Act, and was a prohibited transaction or scheme, contrary to section 57 of the Act;

        1.32 on November 8, 1994, Alexander caused the transfer agent for Arakis to issue 1,200,000 common shares and share purchase warrants to Verwaltungs pursuant to the private placement agreement (the “Verwaltungs Private Placement”);

        1.33 at the time the shares were issued, Arakis had only received $5 million of the $6,372,000 due and payable by Verwaltungs under the private placement agreement;

        1.34 on or about December 2, 1994, Alexander caused Chatel to issue a cheque from Haywood in favour of Verwaltungs for payment of the balance of the subscription price for the private placement. The balance of $1,372,000 was not received from Verwaltungs by Arakis until December 16, 1994;

        1.35 the shares issued pursuant to the Verwaltungs Private Placement were issued when not fully paid for contrary to section 43 of the Company Act;

        The Vananda Private Placement

        1.36 on or about February 7, 1995, Arakis announced that it had entered into a private placement agreement with Vananda Investment Trust Reg. (“Vananda”). The placement agreement was for the issuance of 800,000 units at a price of $4.04 a unit, for a total subscription price of $3,232,000 (“the Vananda Private Placement”);

        1.37 in or about February 1995, Alexander instructed Chatel to issue a cheque for $3,232,000 in favour of Vananda, being the amount required for the subscription price for the Vananda Private Placement;

        1.38 on or about February 22, 1995, Alexander instructed Chatel not to issue the cheque as aforesaid but, instead, to wire $3,232,000 to Verwaltungs, for the account of Corrado Foundation;

        1.39 the funds were wired to Verwaltungs from a Haywood account in the name of Chatel and were subsequently paid to Arakis in payment of the subscription price for the Vananda Private Placement;

        1.40 on or about March 6, 1995, Arakis issued 800,000 of its shares and share purchase warrants pursuant to the Vananda Private Placement;

        1.41 in March 1995, the 800,000 shares and share purchase warrants issued to Vananda were deposited into an account at Haywood in the name of Verwaltungs. The shares were then purchased by Chatel and deposited to an account in the name of Chatel at Haywood, before being transferred, on May 31, 1995, to another account at Haywood in the name of Chatel;

        1.42 Alexander caused Arakis to fail to issue and file a news release and material change report disclosing the fact that Alexander would have control and direction over the securities of Arakis issued to Vananda, contrary to section 85 of the Act;

        Finder’s Fees
        1.43 Alexander authorized Arakis to issue finder’s fees to Martin Christen, in the form of 32,053 common shares of Arakis in relation to Arakis’ private placement to Chatel and 28,879 common shares of Arakis in relation to Arakis’ private placement to Hatfield;

        1.44 Alexander took no steps to confirm that Christen had, in fact, served as a finder or provided any services of value to Arakis; therefore, Alexander caused violations by Arakis as follows:

        1.44.1 the shares issued to Christen were issued for no consideration, contrary to section 43 of the Company Act;

        1.44.2 the shares issued to Christen were issued contrary to sections 34 and 61 of the Act, as they were issued without an available exemption;

        1.44.3 Alexander caused Arakis to violate section 85 of the Act, as the issuance of shares to Christen were not properly disclosed by way of the issuance and filing of a news release or material change report; and

        1.44.4 Alexander caused Arakis to issue and file misleading Form 20’s with respect to this matter;

        The AGI Press Release
        1.45 on July 6, 1995, Alexander caused Arakis to issue a press release (the “AGI Release”) disclosing that Arakis had entered into a contract with a group known as Arab Group International (“AGI”) and its associates for the purpose of financing the Project;

        1.46 the AGI Release stated, in part, that “under the terms of the contract, AGI will provide funding of up to US$750 million, of which US$354 million will be provided by the issuance of a total of 23 million shares (at a deemed price of US$15 per share)” and, further, that the balance of the funding “will be provided by letter of credit to be drawn upon at the discretion of the company”;

        1.47 prior to the issuance of the AGI Release, neither Alexander nor Arakis was able to obtain sufficient independent information to establish a reasonable basis for believing that AGI had the resources or capability to meet its obligations under its agreement with Arakis The AGI Release did not disclose that fact;

        1.48 the effect of the AGI Release was to raise investor confidence in the future prospects of Arakis as evidenced by the trading in Arakis shares on both the VSE and NASDAQ. On July 5, 1995, Arakis closed on the VSE at a price of $23.25 per share on a volume of 7,100 shares and rose to a price of $26 per share on a volume of 15,350 on July 6, 1995. On NASDAQ, Arakis closed on July 5, 1995 at a price of US$16 7/8 per share on a volume of 381,500 shares and rose to a price of US$18 3/8 per share on a volume of 2,211,000 shares on July 6, 1995;

        1.49 on September 19, 1995, Arakis issued a press release disclosing that, as the terms of the agreement with AGI to provide financing to Arakis had not been satisfied, the agreement was terminated;
        Trading Where Undisclosed Material Fact or Change
        1.50 Between April 1993 and December 1, 1995, Alexander provided instructions, for his own accounts, the accounts of JT Alexander and Associates Holding Corporation, and for the accounts of Chatel and Hatfield (into which shares in Arakis held by Chatel, Hatfield, Archmont, Princely and Anthem were deposited). Alexander provided instructions for the sale, from the Hatfield accounts, of 9,534,261 shares of Arakis and, from the Chatel accounts, of 14,408,718 shares of Arakis. At the time of this trading, Alexander knew or ought to have known that the following material facts or changes had not been generally disclosed:
            1.50.1 that Alexander had direction and control over the shares of Arakis held from time to time by Archmont, Hatfield, Chatel, Princely and Anthem;

            1.50.2 that, by virtue of his involvement with those entities, Alexander had, during the material time, direction and control over Arakis shares other than those that were disclosed in his insider reports;

            1.50.3 that the Arakis shares issued to Anthem were not fully paid when issued;

            1.50.4 that, in respect of trades made after August 31, 1994, 500,000 of the Arakis shares issued to Anthem were used to finance the Verwaltungs Private Placement and that the placement was not fully paid for;

            1.50.5 that, in respect of trades made after December 2, 1994, the subscription price for the Verwaltungs Private Placement was paid on behalf of Verwaltungs, in part, by Chatel;

            1.50.6 that, in respect of trades made after February 22, 1995, the subscription price for the Vananda private placement was made on behalf of Vananda by Chatel; and

            1.50.7 that neither Alexander nor Arakis had made sufficient inquiries to establish the financial resources of AGI nor its capacity to provide the funding announced in the AGI release;

        1.51 the trading referred to in paragraph 50 herein was thereby contrary to section 86 of the Act and section 68 of the Prior Act; and
        Failure to File Insider Reports
        1.52 contrary to section 87 of the Act ( section 70 of the Prior Act ) Alexander:
            1.52.1 failed to file insider reports which disclosed his control or direction over and trading in shares in Arakis held by Archmont, Princely, Chatel, Hatfield and Anthem, as outlined in paragraph 1.50.1 above;

            1.52.2 filed an insider report for the month of July 1994 that failed to disclose a private acquisition by Alexander of 100,000 common shares of Arakis from Lutfur Khan as repayment of a loan, and a subsequent disposition of the same shares; and

            1.52.3 Alexander filed an insider report for the month of May 1995 that failed to disclose a private disposition by Alexander of 600,000 common shares of Arakis to Verwaltungs.
    2 Alexander consents to an order by the Executive Director (the “Order”) that:
        2.1 under section 161(1)(c) of the Act, the exemptions described in sections 44 to 47, 74, 75, 98 and 99 of the Act do not apply to Alexander or to JT Alexander and Associates Holding Corporation for a period of 20 years from the date of the Order;
            2.1.1 except that Alexander may trade securities beneficially owned by him or JT Alexander and Associates Holding Corporation at the date of the Order, subject to the following conditions:

            2.1.1.1 that before any trades take place, Alexander must deliver a sworn declaration to the Executive Director listing all of the securities beneficially owned by him or JT Alexander and Associates Holding Corporation at the date of the Order;

            2.1.1.2 that any such trade must take place within one year of the date of the Order through a single registered dealer designated in writingby Alexander and approved by the Executive Director;

            2.1.1.3 that before any such trades take place, Alexander must deliver to the registered dealer a copy of the Order;

            2.1.1.4 that Alexander will instruct his registered dealer to provide the Executive Director with a copy of the confirmation slip evidencing the trade within four days of the date of the trade;
        2.2 under section 161(1)(d) of the Act, Alexander resign any position Alexander holds as a director or officer of any issuer and is prohibited from becoming or acting as a director or officer of any issuer for a period of 20 years from the date of the Order; and

        2.3 under section 161(l)(d)(iii) of the Act, Alexander is prohibited from engaging in investor relations activities for a period of 20 years from the date of the Order.
    3 Alexander has paid to the British Columbia Securities Commission the sum of $1,200,000, $500,000 of which represents a portion of the costs of the investigation.

    4 Alexander undertakes to comply with the Act and the Securities Rules, B.C. Reg. 194/97 and all applicable regulations, policies and guidelines, from the date of this agreement.

    5 Alexander waives any right he may have, under the Act or otherwise, to a hearing, hearing and review, judicial review or appeal related to, in connection with or incidental to this agreement and related orders.


    DATED at Vancouver, British Columbia, on February 23, 1999.


    _____________________________ )
    Witness Signature ) _____________________
    _____________________________ ) James Terrence Alexander
    Witness Name (please print) )
    D.C. Harris___________________ )

    Address )
    2100 - 1075 W. Georgia Street )
    Vancouver, BC_______________ )

    Occupation )
    Lawyer_____________________ )


    DATED at Vancouver, British Columbia, on February 23, 1999.




    Michael J. Watson
    Executive Director
    ©2024 British Columbia Securities Commission