‘The au­thors of their own mis­for­tune’

Busi­ness part­ner in e-gam­ing firm claims he was ‘left out of the loop’

Journal Pioneer - - ISLAND - BY STU NEATBY [email protected]­guardian.pe.ca Twit­ter.com/stu_neatby

Paul Jenk­ins, one of 14 de­fen­dants em­broiled in a $50-mil­lion law­suit re­lated to the prov­ince’s e-gam­ing scheme, be­lieves his busi­ness part­ners used him for his P.E.I. con­tacts, who then “be­gan to leave (him) out of the loop.”

In an af­fi­davit filed late last week, Jenk­ins, who was the sole di­rec­tor of a sub­sidiary of Cap­i­tal Mar­kets Tech­nolo­gies Inc., the com­pany that ini­ti­ated the po­lit­i­cally ex­plo­sive law­suit, paints a pic­ture of a de­cep­tive busi­ness re­la­tion­ship from which he was of­ten side­lined.

In the af­fi­davit, Jenk­ins claims Paul Maines, the pres­i­dent of CMT, and Gary Jes­sop, a di­rec­tor of CMT, were largely the de­ci­sion­mak­ers for the com­pany’s ac­tiv­i­ties and in the end were “the au­thors of their own mis­for­tune.”

Fol­low­ing a se­cu­ri­ties in­ves­ti­ga­tion in 2013, CMT and its P.E.I.based sub­sidiary, 7645686 Canada Inc., were sanc­tioned for the il­le­gal distri­bu­tion of se­cu­ri­ties. The com­pany reached a set­tle­ment in which they paid $15,000 in fines. Since that time, CMT has ini­ti­ated a sprawl­ing $50-mil­lion law­suit against the provin­cial gov­ern­ment and 14 other de­fen­dants. The cast of de­fen­dants in­cludes Jenk­ins, former premier Robert Ghiz, former fi­nance min­is­ter Wes Sheri­dan, cur­rent deputy fi­nance min­is­ter Neil Ste­wart and sev­eral P.E.I.-based lawyers. Be­tween 2010 and 2012, CMT had at­tempted to work with the prov­ince to es­tab­lish a fi­nan­cial ser­vices plat­form for a reg­u­la­tory regime of on­line gam­bling op­er­a­tions.

In a state­ment of claim filed in June on be­half of CMT, Jenk­ins is por­trayed as a key fig­ure who drew Maines to P.E.I., and es­tab­lished con­nec­tions with lo­cal busi­ness and po­lit­i­cal fig­ures. The state­ment ac­cuses Jenk­ins of breach­ing his fidu­ciary duty as di­rec­tor of 7645686 Inc. The law­suit claims Jenk­ins dis­closed pro­pri­etary in­for­ma­tion and made false claims about CMT dur­ing the se­cu­ri­ties in­ves­ti­ga­tion.

In his af­fi­davit, Jenk­ins claims that he was mis­led about the terms of a $100,000 loan he made to CMT in 2011, and that the loan was never re­paid. He also claims he is owed $41,614 in ex­penses paid while he was work­ing on be­half of CMT.

In a pre­vi­ous state­ment of de­fence, filed on June 25, 2018, Jenk­ins states that, at the time, he “did not un­der­stand that he would be the sole of per­ma­nent di­rec­tor of 7645686.”

In the re­cent af­fi­davit, Jenk­ins does not make this claim, but states sev­eral times that he was the sole di­rec­tor.

Jenk­ins claims most de­ci­sions re­gard­ing the com­pany were made by Maines and Jes­sop and that he was “left com­pletely in the dark.”

Jenk­ins out­lines the point in which his re­la­tion­ship with Maines be­gan to sour. He de­scribes an in­ci­dent in which Maines left a con­fi­den­tial re­port about the e-gam­ing ini­tia­tive in the of­fice of a Sco­tia MacLeod em­ployee. Jenk­ins said he found out about this after re­ceiv­ing an an­gry phone call from then-fi­nance min­is­ter Wes Sheri­dan. “This in­ci­dent led me to two con­clu­sions. The first was that I couldn’t rely on Maines’ word. The sec­ond was that I couldn’t rely on Maines’ judg­ment,” Jenk­ins states in the af­fi­davit.

Jenk­ins notes that the con­fi­den­tial re­port, which was pre­pared for McInnes Cooper, bears the name and logo of the gov­ern­ment of P.E.I. McInnes Cooper was re­tained at the time to rep­re­sent the Mi’kmaq Con­fed­er­acy of P.E.I. as part of the e-gam­ing ini­tia­tive. The re­port is in­cluded with the af­fi­davits filed by Jenk­ins.

A 2016 re­port pre­pared by P.E.I.’s au­di­tor gen­eral states McInnes Cooper de­nied act­ing on be­half of the provin­cial gov­ern­ment on the e-gam­ing ini­tia­tive. Jenk­ins has re­quested the claims against him be dis­missed. None of the claims have been proven in court.

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