The B.C. Securities Commission has alleged six Metro 91原创 residents, including a former securities lawyer, orchestrated a pump-and-dump scheme across three 91原创-based companies, netting approximately $46 million.
Central to the alleged multi-faceted scheme is Core Capital Partners Inc. and its sole director Kamaldeep Thindal, a Langley resident, and its CFO Amandeep Thindal, of Surrey.
The Thindal brothers are named as hearing respondents to the administrative charges of violating the B.C. Securities Act alongside: 91原创 resident Yazan Al Homsi, Core鈥檚 former vice-president of investments; Delta resident Pardeep Luddu, a Core associate; Aarun Kumar, a former registered securities dealer living in 91原创 and Core鈥檚 vice-president of corporate development; and Kumar鈥檚 uncle Mani Chopra, a retired securities lawyer residing in West 91原创.
The commission alleges Core was the unregistered investment vehicle used to raise money for the three companies that were claiming to be in business sectors that were particularly popular with investors at the time: health-care technology, cryptocurrency mining and cannabis production.
The group, together and separately, obtained cheap shares of the companies and then concealed their control of them via relatives, corporations, and nominees. The group then coordinated misleading news releases and promotional campaigns to increase interest (the pump) in the stock before selling those concealed shares (the dump) during the promotions, for net proceeds of $46 million.
Kamaldeep Thindal, who resides in a $3.7-million home on a half-acre in south Langley, according to securities documents, is alleged to have netted $22.2 million from the alleged illegal trades.
Following its investigation, the commission claims Al Homsi netted $11.4 million; Kumar took in $5.1 million; Amandeep Thindal netted $4.5 million; Luddu obtained $1.7 million; and Chopra profited to the tune of $1.2 million.
鈥淭he Respondents carried out a scheme that created a misleading appearance of trading activity in, or an artificial price for, the securities of three reporting issuers in British Columbia,鈥� stated the commission鈥檚 hearing notice signed by executive director Peter Brady July 21.
The commission is also alleging Core committed market manipulation, as assisted by the group.
鈥淲hile they were directors, officers, employees or agents of Core Capital, K. Thindal, A. Thindal, Al Homsi, Chopra, Luddu and Kumar authorized, permitted or acquiesced in Core Capital鈥檚 contraventions鈥� of the B.C. Securities Act, the notice states.
As alleged, in July 2015 the group began accumulating a large share position of health-care technology firm Reliq Health Technologies, which had been trading on the TSX Venture Exchange and over-the-counter markets in the United States. They did so by replacing Reliq's board of directors and CEO with nominees under their control, as Amandeep Thindal became CFO and the bank signatory. By September 2017, the group amassed about a quarter of the company鈥檚 68.4 million free-trading shares under hidden beneficial ownership structures.
Next, according to the commission, came the promotions; 鈥淎l Homsi issued highly promotional tweets about Reliq using the Twitter account @MakingMoneyNow1鈥� and did so without disclosing his interest in the company.
And, Core Capital assisted Reliq with fundraising through private placements during the Reliq promotional period, the commission alleges.
Reliq misled investors in January 2018 when it claimed it had reached profitability, the commission further alleged.
While Reliq reported about $2 million in revenue from its 鈥減atient monitoring platform鈥� during the alleged promotional period it had, in fact, only collected $51,540 or about 2.6 per cent of that amount, the commission noted.
The alleged Reliq scheme netted $19.4 million for the group, in total, the notice states 鈥� the largest proceeds from one company.
The second largest alleged net proceeds came from the promotion of Integrated Cannabis Company Inc., a cannabis firm traded on the 91原创 Securities Exchange.
The group is said to have secretly gained control of 60 per cent of Integrated鈥檚 14 million shares, in February 2017.
鈥淭he Respondents installed nominees as directors and officers of Integrated, including Kumar鈥檚 brother, who was also a bank signatory. The directors and officers followed the Respondents鈥� instructions with respect to the company. A. Thindal was also a bank signatory for Integrated,鈥� the notice states.
Core helped Integrated sell new shares to investors via private placements and by June 2018 the group held 49 per cent of the company鈥檚 36 million shares.
On the back of promotional campaigns, Integrated鈥檚 share price increased from a low of $0.05 in January 2017 to a high of $2.02 in October 2018.
鈥淒uring the Integrated promotional period, the Respondents dumped approximately 20 million shares for net proceeds of approximately $19 million,鈥� the notice stated.
The third company that was allegedly used as a vehicle for fraud was Block One Capital Inc., formerly Essex Angel Capital Inc. (Essex Angel), and now known as AI Artificial Intelligence Ventures Inc., also traded on the TSX Venture Exchange.
Similar to the other two alleged pump and dumps, the group amassed shares of the company, this time starting in 2014. Amandeep Thindal then became a director and switched the company鈥檚 direction to cryptocurrency mining. Then, Al Homsi promoted the venture with misleading information and Core raised funds by selling private placements.
Part of the promotion for Block One was the acquisition of a cryptocurrency miner, according to the commission.
Despite company claims of revenue generation, 鈥淏lock One did not generate revenue from mining any cryptocurrency currency during the Block One promotional period,鈥� stated the commission.
provides no specific examples on Luddu鈥檚 and Chopra鈥檚 involvement in the scheme.
The group is scheduled to attend its first appearance before the commission on Oct. 12, in order to schedule a hearing date.
Core Capital responds to allegations
On July 24, Core responded to the commission's allegations by largely taking issue with the length of time the commission took to investigate the company and the measures it took during that time.
鈥淲e have grown increasingly concerned with the Commission's use of its significant and largely unchecked powers 鈥� to freeze our assets for over four years without any allegation of wrongdoing, and to pursue what we view is a meritless investigation,鈥� stated the response issued by Alistair Morton, a consultant for Navigator.
鈥淲e repeatedly communicated our concerns to the Commission, and were advised on several occasions that the investigation was near completion. In fact, we were given dates for when the investigation would be completed, only to have those dates pass without further action,鈥� added the company.
Core specifically said the commission froze several bank accounts, brokerage accounts and certain real assets of both Thindals, in April 2019. And during the five-year investigation 鈥渢he Commission has had access to our personal and business bank accounts, brokerage accounts, trading history, and personal communications,鈥� thus making the company 鈥済o to incredible lengths to protect our interests and privacy, without an opportunity to defend ourselves.鈥�
The company said it was 鈥渃ommitted to maintaining and adhering to the highest levels of compliance and ethical business practices,鈥� had worked transparently with the commission and 鈥渨e had hoped to conclude this matter without the need for a public spectacle.鈥�
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Editor's note: This story has been updated to include a statement from Core Capital.
