Catherine Esson, for Commission Staff.

      This is a hearing under sections 144(1) and 144.1 of the Securities Act, S.B.C. 1985, c. 83 into the affairs of Batha Capital Corporation, J-H-R Investments Ltd. and John Henry Rempel, aka John Dyck.  A notice of hearing dated November 2, 1994, alleged that:

--		Batha, Rempel and J-H-R, during April and May of 1993, distributed, or purported to distribute, securities of Batha to residents of British Columbia without registration and without a prospectus having been filed and a receipt obtained, contrary to sections 20 and 42 of the Act;
--		Rempel, on his own behalf and on behalf of J-H-R and Batha, with the intention of effecting a trade in the securities of Batha, and without the written permission of the Superintendent of Brokers, made written and oral representations to the purchasers of Batha securities, that the securities of Batha would be listed and posted for trading on The Toronto Stock Exchange ("TSE") and on the North American Securities Dealers Automated Quotation System ("NASDAQ"), contrary to section 35 of the Act; and
--		Batha, J-H-R and Rempel engaged in or participated in a transaction or scheme relating to a trade or acquisition of securities of Batha when each knew, or ought reasonably to have known, that the transaction or scheme would perpetrate a fraud on the purchasers in connection with the securities of Batha, contrary to section 41.1 of the Act.

      Notice required to be given to a respondent in a hearing is sufficiently given if it is sent in accordance with section 156 of the Act.  Section 156 of the Act provides, in part, that a record required to be sent to a person under this Act or the regulations shall be sent to the latest address known for that person and it is deemed to have been received on the seventh day after mailing.

      On the basis of the evidence before us, we have concluded that J-H-R, Batha and Rempel received notice of the hearing in accordance with section 156 of the Act.  The provisions of section 156 of the Act apply to all records required to be given under the Act and no distinction is made according to the content of the record.  Accordingly in our view Commission staff were not precluded from pursuing all of the allegations in the notice of hearing.  However having chosen not to pursue the allegation relating to section 41.1 of the Act, we have not considered it in this decision.

2.  BACKGROUND

      J-H-R was incorporated on March 15, 1993, and is not a reporting issuer under the Act.  At all material times, Rempel was the sole owner and a director of J-H-R.  Bruce Busby was the president of record of J-H-R until he resigned on April 5, 1994.

      Rempel and Busby had first met in early March 1993 at a hostel in Vancouver where, Busby, a retired electrician, was working.  Rempel, who was residing there temporarily, had persuaded Busby to become the president of Rempels company to assist Rempel in hiding his business interests from his wife with whom he was having matrimonial difficulties.  These interests purportedly included the development of commercial properties, a new golf course, batteries and aggregate mines in the United States.  One project in particular concerned the development of a hotel and shopping centre complex in Coquitlam that Busby believed had considerable economic potential.  Busby had never been a director of a company before and his job at J-H-R was to run the office at Rempels direction.  Although Busby had signing authority for what he believed was the only corporate bank account at The Royal Bank of Canada, it was Rempel who determined how any corporate funds were to be spent.  Busby was not aware that J-H-R had a second account at the Hongkong Bank of Canada.  Busby said that Rempel told him that he had money off shore and would deposit funds every two weeks into J-H-Rs Royal Bank account.

      Early in 1993 Gino Greco, a communications consultant for Page Canada, was called by Rempel to provide a quote for telecommunication equipment for J-H-R.  During the course of discussing the companys telecommunication needs, Rempel began to tell Greco of his intention to start up a new company into which J-H-R would put certain of its business interests. Rempel showed Greco a package of various pictures and letters documenting the development of these interests, including the Coquitlam project.

      Over the next several months Greco and Rempel continued to discuss the business plans of J-H-R.  Rempel then asked Greco if he wanted to invest in the new company, Batha, into which Rempel would transfer these projects.  Rempel told Greco that J-H-R was his company and that through J-H-R, he would start up Batha and take it public on TSE and NASDAQ.  Greco, who had limited investment experience, agreed to invest in Batha based on Rempels representation that Batha was to be listed on the TSE and NASDAQ and that all of J-H-Rs projects would be transferred into Batha.

      On April 22, 1993, Greco signed a subscription form provided to him by Rempel under which he subscribed for 8,000 shares of Batha at $0.65 a share.  At the same time he provided Rempel with a cheque made payable to J-H-R in the amount of $5,200.  The subscription form read, in part, as follows:

	BATHA CAPITAL CORPORATION will be trading on the T.S.E. exchange in Toronto and NASDAQ exchange in New York. This public company intends to raise funds to invest in such Investments as acquisition of Technology and Marketing of the power units (D.C. Energy for North America), large copper deposits for development, residential and recreational developments and business development and acquisitions.
	No commission is payable to anyone on this purchase.  I agree to abide to by what ever pooling arrangements may be stipulated by a Security(sic) Commission or other Regulatory Body, whose provisions may require compliance during the progress of the company.
	I acknowledge that this purchase is a speculation and certify that it is for my own account and risk and that I am not acting for or on behalf anyone other than myself.

      None of the six investors received a prospectus or offering memorandum describing Batha or its business.  The only documents Greco received were those in the package relating to the proposed development of the Coquitlam project. Greco had no relationship with Rempel, other than the one arising during the course of providing telecommunication equipment to J-H-R.

      Over the next few months the six investors waited for their share certificates and for Batha to get listed on the TSE and NASDAQ.  Greco called Rempel every week to inquire about Bathas progress and received a variety of excuses for the delays.

      On July 12, 1993, Greco received a letter from Rempel on J-H-R letterhead, stating:

	This is to inform you and your people that we are negotiating with two trust companies.  Montreal Trust and Royal Trust to obtain the best deal for being the Transfer Agent for BATHA CAPITAL CORPORATION.  This should be completed within two weeks, the Transfer Agent will  issue the shares of the company.  Negotiations are being done for a $3,000,000 first private placement into the company.  This should be in place within three weeks out of Toronto.
	We anticipate to set the price of the share at minimum $3.00.  This is what needed to be on NASDOQ (sic) in New York.
	It is very likely that we will start trading on T.S.E. and then by the end of September 1993 on NASDOQ (sic) in New York if no unforeseen delays arise.
	The board of directors should be in place within three weeks.
	Is anticipated that Neighen Demers of Toronto will be the companies security law firm and Chamber Phillips & Co. of Vancouver will be the auditors.

      Eventually Batha share certificates, signed by Leonard Timpany as president and dated March 1, 1994, were delivered to each of the six investors.  Corporate records indicate that Batha was incorporated on January 19, 1994, in British Columbia and is not a reporting issuer under the Act.  Leonard Timpany was Bathas sole officer and director.  Greco said he was surprised and concerned to see Timpanys name on the certificates as he knew Timpany was a street person, or in Busbys words a "dumpster jumper", who ran errands for Rempel at J-H-Rs office.

      As his concerns increased, Greco approached a lawyer and on March 9, 1994, a letter on behalf of the six investors was sent to J-H-R demanding the return of the subscription funds for the Batha shares.  Receiving no response, Greco approached Busby.  A meeting was held on March 17, 1994, between the investors, Busby and the real estate agent involved in the Coquitlam project in an effort to remove Rempel from Batha and J-H-R and to proceed with the Coquitlam project.  The meeting was not successful and Busby returned to J-H-Rs offices only to find the locks changed and his personal effects hanging from the door.

      Banking records indicate that the six investors subscription funds were deposited into J-H-Rs Royal Bank account and there is no evidence that the funds were transferred to Batha. Indeed, there is no indication that Batha had any bank accounts.

      None of Rempel, Batha or J-H-R is registered in any capacity under the Act.  Commission staff testified that none of Rempel, Batha and J-H-R has filed any documents under the Act relating to an offering memorandum, prospectus or registration application.  Commission staff testified that each of the TSE and NASDAQ has confirmed that there were no filings on record regarding any of Rempel, Batha and J-H-R. Similarly there were no applications pending for listings on the TSE or NASDAQ for J-H-R or Batha.

3.  DECISION

      Commission staff alleged that each of the respondents traded in securities contrary to section 20 of the Act and distributed securities without filing and obtaining a receipt for a prospectus contrary to section 42 of the Act.

      Section 20(1)(a) of the Act provides that no person shall trade in a security unless he is registered as a dealer, or a salesman, partner, director or officer of a registered dealer and is acting on behalf of that dealer.

      Security is defined in section 1(1) of the Act to include;

(c)

a document evidencing [a]... subscription ... to a security, (d) a bond, debenture, note or other evidence of indebtedness, share, stock, unit, unit certificate, participation certificate, certificate of share or interest, preorganization certificate or subscription...

Trade is defined in section 1(1) of the Act to include:

(a)

a disposition of a security for valuable consideration whether the terms of payment be on margin, instalment or otherwise..., ... (e) any act, advertisement, solicitation, conduct or negotiation directly or indirectly in furtherance of any of the activities specified in paragraphs (a) to (d).

      We find that each of Rempel, Batha and J-H-R was trading in securities and each was required to be registered under section 20(1)(a) of the Act.  None of these respondents was registered under the Act and no exemption from registration was available for this trading.  Accordingly, we find that each of Rempel, Batha and J-H-R was trading in securities in contravention of section 20(1)(a) of the Act.

      Section 42(1) of the Act provides that:

Unless exempted under this Act or the regulations, a person shall not distribute a security unless a preliminary prospectus and a prospectus respecting that security (a) have been filed with, and (b) receipts obtained for them from, the superintendent.

(a)

a trade in a security of an issuer that has not been previously issued, ...

      Commission staff also alleged that Rempel, on his own behalf and on behalf of J-H-R and Batha, contravened section 35 of the Act by representing, with the intention of effecting a trade in the securities of Batha, that the securities of Batha would be listed and posted for trading on the TSE and on NASDAQ.

      Section 35(1)(c) of the Act provides that:

No person, with the intention of effecting a trade in a security, ... (c) shall, except with the written permission of the superintendent, make any representation, written or oral, that       (i)  the security will be listed and posted for       trading on a stock exchange, or       (ii)  application has been or will be made to list       and post the security for trading on a stock       exchange.

      Subscriptions forms were delivered to Grecos five friends who signed them and delivered them and the purchase price for Batha shares to Rempel and J-H-R.  It is clear to us that the intention of Rempel, on his own behalf, and on behalf of J-H-R and Batha, in making these representations was to induce the six investors to purchase securities of Batha.  The Superintendent did not give written permission to anyone regarding these representations under section 35 of the Act. Consequently, Rempel, on his own behalf and on behalf of J-H-R and Batha, contravened section 35(1)(c) of the Act.

      The conduct of Rempel in the distribution of Batha shares is precisely that kind of conduct that brings the securities markets into disrepute.  He was deceitful and deliberately mislead Greco and the other investors.  It is apparent to us that he had no intention of complying with any regulatory requirements.  We have not considered the allegations relating to fraud and section 41.1 of the Act in considering what orders are necessary in the public interest.  However, on the basis of the flagrant breaches of sections 20, 35 and 42 of the Act alone, we have determined that it is in the public interest to keep Rempel out of the securities markets for a substantial period of time.

      Accordingly, we order:

1.		under section 144(1)(b) of the Act, that all persons cease trading in Batha securities;
2.		under section 144(1)(c) of the Act, that the exemptions described in sections 30 to 32, 55, 58, 81, and 82 of the Act do not apply to Rempel, J-H-R and Batha  for a period of 10 years from the date of this order;
3.		under section 144(1)(d) of the Act, that Rempel is prohibited from becoming or acting as a director or officer of any issuer for a period of 10 years from the date of this order;
4.		under section 144.1 of the Act, that Rempel, J-H-R and Batha each pay an administrative penalty of $5,000; and
5.		under section 154.2 of the Act, that Rempel, J-H-R and Batha pay costs of or related to the hearing in an amount to be determined following submissions from the parties.