Bridging investors call for probe into PwC management of assets
BNN Bloomberg
Bridging Finance investors are calling for an investigation into the troubled private lender's sale process by PricewaterhouseCoopers.
Bridging Finance Inc. investors are calling for an investigation into the troubled private lender's sale process by PricewaterhouseCoopers Inc. (PwC), alleging that the firm's proposed wind-down by its appointed court monitor will be too costly and would be better managed elsewhere.
An Ontario court appointed PwC to take control of Bridging Finance on Apr. 30 at the request of the Ontario Securities Commission.
That decision was made pending the outcome of an investigation into allegations the lender and its then-senior executives, including Chief Executive Officer David Sharpe and his wife Natasha, who was chief investment officer at the firm, mismanaged funds and failed to disclose conflicts of interest. The Sharpes were subsequently fired from their roles after PwC stepped in. The allegations have not been proven in court.
According to a release on Tuesday, the investor group alleges that PwC is trying to insert itself to wind down Bridging's funds over a five-year period while collecting high management fees that could cause steep losses to the firm's portfolio. The investor group is calling on all Bridging investors to call for a vote and request the firm's assets be managed by an active portfolio manager rather than the wind-down proposed by PwC.
A court filing in December made by PwC suggests that Bridging's losses attributed to unitholders could be about $580 million, roughly 36 per cent of the $1.6 billion the firm lent out. That would leave Bridging with approximately $1 billion in funds that investors would be able to redeem.
The investor group added that PwC also has a lack of experience in managing private debt and is not a registered portfolio manager. It also noted concerns it has about PwC not recovering loans awarded to investments in the First Nations communities valued at $250 million or a lack of discussion regarding the $400 million in cash controlled by Bridging and has yet to be distributed back to investors.
