The B.C. Court of Appeal has rejected a couple’s bid to discharge $25 million in debt owed primarily to the B.C. Securities Commission and Minister of National Revenue after they were found to have manipulated stock at the expense of people’s retirement savings.
Thalbinder Singh Poonian and Shailu Poonian had appealed to the court after the B.C. Supreme Court rejected their application to discharge the debt, which includes penalties, repayment of ill-gotten funds and unpaid taxes.
Typically, people may have their debts discharged under “fresh start” principles and if they are “honest but unfortunate debtors.”
But neither courts found this to be the case for the Poonians, who continued to deny the misconduct.
After a lengthy legal process, the Poonians have now exhausted their appeals between the commission and the courts.
The Supreme Court ruling last March noted the Poonians “had made no substantial effort to pay their debts and had no ability to do so, and had made little efforts to maintain suitable employment.”
The Supreme Court also concluded that the tax liabilities of the Poonians could not be attributed to any economic factor beyond their control.
Justice Peter M. Willcock, Madam Justice Mary V. Newbury and Madam Justice Gail M. Dickson of the B.C. Court of Appeal sided with the Supreme Court to dismiss the appeal, with their Sept. 24 ruling, published Thursday.
In 2015, a commission panel found the Poonians manipulated the share price of OSE Corp., an Ontario company whose shares traded on the TSX Venture Exchange.
The Poonians had sold overpriced shares to “unsophisticated investors,” in 2008, according to the Supreme Court ruling. “They had done so with the assistance of an entity in the business of advising people in debt on how to access funds from their RRSPs and retirement accounts.
“Essentially, the commission found that the Poonians pumped up the price of the shares of a publicly traded company and then offloaded those shares at inflated prices to unsophisticated investors with financial problems.”
Thalbinder Poonian directed trading of OSE shares in the brokerage accounts of Perminder Sihota — who was also penalized for contravening the Securities Act — as well as the accounts of nine secondary participants.
The investors lost about $7 million, the same amount the Poonians and Sihotas (Manjit and Perminder) gained.
The Poonians and Sihotas are permanently barred from working in the capital markets.
The Supreme Court indicated “the Poonians’ actions were morally unacceptable and harmful to society, such that they should not be rewarded with a release of those debts.”
