Manor ordered to return to Toronto

He has put up a fight, but Boaz Manor will soon be on his way back to Canada to face the charges laid against him by the RCMP and the Ontario Securities Commission over the collapse of Portus Group.

An Israeli court has cleared the way for Manor’s return to Toronto, and he is expected to board a flight on Tuesday, November 13, 2007, accompanied by a representative of KPMG Inc., the trustee of the bankrupt estate of Portus. The court has ordered that the flight be direct, with no other stops prior to landing in Toronto.

“The court determined that these are the conditions [of Manor’s return],” says Robert Rusko, senior vice-president, KPMG Inc. “The court was allied to our concerns that he was a flight risk. He had worked out an arrangement with the RCMP, but it was an agreement, not a court order.

“Mr. Manor left Canada quite early on in the receivership administration. It’s been a long chase, and frankly he’s been fighting us every step of the way.”

Of course, a case that involves high finance, international travel and a flight from the Mounties would be nothing without a stash of diamonds. Manor has admitted in past statements to holding a cache of gems worth an estimated $11 million US, but he says they are no longer in his possession.

Manor claims to have given the diamonds to Yitzchak Toib, an Israeli private banker, with instructions to deliver them to Manor’s sister-in-law in Hong Kong. Manor claims that Toib still holds the gems, but Toib insists that he delivered the diamonds. Manor’s sister-in-law says she received them, and Rusko says KPMG is inclined to believe Toib and the sister-in-law.

The dispute over the whereabouts of the diamonds led to the Israeli court order that banned Manor from leaving the country until the matter was resolved.

“All we know is that Manor says he gave them to Toib; Toib agrees that he took them to Hong Kong,” says Rusko. “[Toib’s] story is that he delivered them, and Manor’s story is that he never got them back.”

There are still $17 million in investor assets missing, says Rusko. The firm alleges that Manor used some of this amount, about $750,000, as a retainer for his lawyer in Israel. The lawyer has been informed that the cash, currently held in trust, is investor money and that he or she should not draw from the pool.

“Once we finally examined him under oath, [Manor] told us that he had no personal interest in those assets, and yet he’s not agreeing to waive any claim on those assets,” says Rusko. “He’s forcing us to do procedural things to try to recover that money.”

Aside from Manor’s return to face Canadian justice, there is also some positive financial news for Portus investors. KPMG has announced it will make an interim payment of 15 cents on the dollar for proven claims.

KPMG currently oversees the management of Portus assets, including deposit notes valued at about $590 million. Rusko points out that this value is based on current market bids, and does not represent a guaranteed settlement price if the notes were to be redeemed.

The notes had an initial value of $529 million, and Rusko says they will mature starting in late 2008–2009 and be worth $611 million.

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com