Former Finance Minister Carlos Leitão finds it “very disturbing” that a vice-president of the Caisse de depot et placement du Québec was the subject of a search in an insider trading case. He also believes that the institutional investor should fully publish the internal report on ethical breaches in its subsidiary Otéra Capital, produced in 2019.
Posted at 7:41 p.m.
Updated at 9:50 p.m.
The revelations on the problems of ethics at the Fund have accumulated this week, and its former official within the liberal government of Philippe Couillard believes that it has every interest in showing white paw.
Monday, The Press revealed that the Autorité des marchés financiers (AMF) raided the Caisse twice in 2020. Its investigators notably went to the office of Justin Méthot, then Vice-President of Private Placements, responsible for investments in large companies , suspected of insider trading.
Tuesday and Wednesday, The Journal of Montreal revealed that the Otéra Capital subsidiary had granted 26 loans that put one of its senior executives in a conflict of interest situation.
The financings include a loan of 20.5 million to the owner of a shopping center in Terrebonne, a company in which the first vice-president and chief investment officer at Otéra, Paul Chin, was a shareholder.
A confidential investigation
After a series of revelations from Montreal Journal on ethical breaches at Otéra in the winter of 2019, the Caisse had commissioned an internal investigation from the law firm Osler. After going through 1.5 million documents, the institutional investor decided not to publish the investigation report.
The Caisse had instead released a summary of the document, which said nothing about Paul Chin’s conflicts of interest. According to The Journal of Montrealshe had just summoned him to sell his shares in real estate companies that were clients of Otéra.
These new revelations made Carlos Leitão, head of the Caisse as Minister of Finance from 2014 to 2018, jump.
PHOTO JACQUES BOISSINOT, CANADIAN PRESS ARCHIVES
Carlos Leitão, former Minister of Finance and Liberal Critic for Public Finance and Integrity in Public Procurement
“It surprises me a lot,” he said of the search in the office of ex-vice-president Justin Méthot in January 2020.
We are talking about possibilities of insider trading. This is very disturbing for an organization with the credibility and reputation of the Caisse de depot et placement. But we will let the AMF do its job.
Carlos Leitão, Minister of Finance of Quebec from 2014 to 2018
Carlos Leitão believes that this is an additional argument to allow the Auditor General of Quebec (VGQ) to scrutinize the practices of the Caisse in greater depth.
On March 16, auditor Guylaine Leclerc demanded more powers from Quebec to carry out performance audits at the institutional investor. She had just tabled a report explaining how the Caisse should improve its controls to detect fraud and conflicts of interest.
“It would allow him to make a public analysis of his activities,” he said. However, he stresses that Quebec should find a way to avoid duplication with the external auditors who already report on the Caisse’s activities.
QS, Liberals and PQ want to shed light
The other opposition parties share these observations.
At Québec solidaire, the spokesperson for the economy Ruba Ghazal has just requested that the Committee on Public Finances be convened to “analyze the integrity measures in place at the Caisse […] as well as the advisability of subjecting it to the performance audits of the VGQ”.
PHOTO JACQUES BOISSINOT, THE CANADIAN PRESS
The spokesperson for the economy at Québec solidaire, Ruba Ghazal.
“Several elements of recent news lead us to ask ourselves serious questions about these issues, including the recent report of the VGQ, allegations of insider trading on the part of a vice-president or the granting of a loan to a company in which an officer of a subsidiary of the Caisse had an interest”, mentions his letter to the president of the Commission, the CAQ member Jean-François Simard.
Carlos Leitão also believes that Quebeckers should publish the full 2019 investigation report on ethical breaches at Otéra. “I would say that it is even in the interest of the Fund, to show its credentials,” he said.
Same point of view in the Parti Québécois.
If the Caisse has nothing to hide, let it publish the report! If she doesn’t want to do it, is it because there are things in there that she wouldn’t want made public?
Sylvain Gaudreault of the Parti Québécois, Vice-Chair of the Committee on Public Administration
The head of media relations at the Caisse, Maxime Chagnon, replies that the publication of the 2019 report would contravene its “obligations to protect personal information”.
The summary it published did not name any of the four people who had had to leave the Caisse after the internal checks, including the CEO of Otéra Alfonso Graceffa.
As for Finance Minister Eric Girard, he refuses to grant increased powers to the auditor to scrutinize the practices of the Caisse, without explaining why.
“Ethics and compliance are non-negotiable elements,” wrote its press officer, Fanny Beaudry-Campeau, in an email to The Press. It is up to the Caisse to reassure Quebecers. »