We believe the facts should be out there. Click on the comments link to view the discussion. The comments on this post are from a previous discussion thread from another site. We feel that the information should be available and the discussion should continue. Scroll down to the end of any page to post your own comment.
April 3rd, 2009 at 12:00 am
I am getting mixed information…I heard that Dave Jones mentioned that the 2% fee is not an issue anymore and now I hear that we are to still consider the deal with Strategic?? CE can’t even deliver us a consistent message.
We know that the CE group are all trying to save their own hides. I still think that there is a serious conflict with replacing the GP with Avenue Commercial.
What information does anyone have about Strategic Group and Riaz Mamdani? Seems to operate surreptitiously and anything I have heard thus far is negative.
April 3rd, 2009 at 12:00 am
very interestingf and informative post
April 3rd, 2009 at 12:00 am
First and foremost I would suggest that homework is necessary for ALL investors to fully read and understand the Limited Partnership Agreement and OM so you know your rights including removal of the General Partner and the processes that are involved. If you don’t understand these documents then take them to your lawyer for clarification.
1. You as LP investors have every right to request a list from the General Partner of fellow LP investors in your specific LP that you invested in. You should never accept any answer that indicates you cannot have this list due to “privacy issues” or any other rationale provided by any GP so I do hope that someone (including legal counsel if necessary) has requested lists. There are LP investment companies in this industry that actually provide all LP investors with the full contact info of their LP co-investors when they issue the investment certificates.
In the event that you are not successful in obtaining these lists from the GP you may not be aware of this but the information is also publicly available through any Corporate Registries office. In order to access this information you will need to provide the full name of the Limited Partnership (found in LP Agreement). The Registries office can pull up a microfilm # and request from Edmonton the actual LPA and full listing of investors. Unfortunately you will probably not get proper contact info for the RRSP investors as it is likely CE’s address provided.
Sounds to me like you people need to get organized as a group. How many investors are actually aware of this thread and its contents? What other means are being utilized to unify investors to discuss issues and find resolution?
You definitely do have the right to look at the CE and LP books and perform an audit (at LP cost); this includes the ability to view rent rolls/tenant information and any other relevant documents.
A good Securities lawyer can also act on your behalf or at the very least provide some direction/get answers and documents to you from the GP. Intimidation tactics should not be tolerated nor should small investor meetings be taking place. This is totally improper and contrary to LPA; it smacks to me of the famous “divide and conquer” battle tactic.
2. If you have concerns/questions over asset titles, the financial “lifts” for CE, mortgages and various liens and caveats placed on your LP assets you can get all of this information when you pull titles at any Registries office (including AMA). However in order to get this information you will need to provide them with the correct “legal description” of the asset (found in OM and perhaps any marketing package as well-ie. “Lot #, parcel identifier #” etc).
Every item registered against title also has a registration # attached to it and these too can be pulled (even actual signed mortgage documents) by Registration # to drill down for greater detailed knowledge/facts. Obviously you need to pay for all documents pulled/printed but it might be well worth the effort/time and cost to really understand what has been going on and is currently going on with your LP assets.
You may even ask for “historical” titles to be searched on buildings and decide from there which ones you want pulled. The Registries office personnel can tell you what years are available (ie. various dates when title has transferred).
I have heard a rumour that Riaz Mamdani actually has already bought CE and its assets. This could certainly be verified by anyone conducting Corporate Name Searches and title searches on assets. If you see recent transactions of land transfers or caveats registered against the properties or “lis pendens” claiming ownership of assets due to “purchase and sale agreements” then I would suggest you search those details further. Any transfer of assets is illegal without your yes vote; any “purchase and sale agreements” or ownership claims by other parties are also illegal and fraudulent.
I find it extremely odd and suspicious that CE executive have not presented the option to investors to list the assets on the open market for sale. It seems rather suspect that Mr. Mamdani has “preferential” position when it seems you have no knowledge of what your assets are worth or what they would sell for. Is this also because these buildings are so highly leveraged with debt that investor equity has been reduced to less than original value? Again is it because investors paid too much for these buildings in the first place, far above appraised value? If these buildings and investments were properly managed in the first place would it not stand to reason that CE executives would not need to be “bailed out”? Is it a coincidence that Riaz Mamdani shows up during such a time of “crisis” or is this something that has been set up to occur for quite some time?
3. Dave Humeniuk has indeed formed a new investment company in Calgary called Teluric International Investments Ltd. His web-site is http://www.realisticreturns.net. Lately he has been performing some subtle advertising by offering up financial information in locally published community newsletters. Go on his web-site and read his biography with all of his accomplishments to date.
Information about RECA sanctions against him can indeed be found on the Internet. Also note that he was one of the original Officers of Platinum Equities Inc. another private real estate investment company in Calgary offering similar investment opportunities to the public before Mr. H. launched CE in partnership with Dave Jones.
4. I noticed that quite a few of you have mentioned removal of CE as the General Partner and that you are researching other companies to take over this role. If one of these companies to be considered is Platinum Equities I believe that a little research will show that the founder and CEO of Platinum Equities has had and continues to have many major business dealings with the same Riaz Mamdani mentioned in this CE thread.
Transactions have taken place between these two parties with Mamdani’s companies Strategic Financial, Strategic Acquisitions, Oxford Capital Corp to name but a few and they involve LP and other investor assets; many of these transactions have been left undisclosed to investors and relationships between the parties not defined clearly if at all.
5. I would concur with others in this thread to stress that it is necessary for “the many” and not “the few” to take necessary actions and also file appropriate complaints with Alberta Securities Commission against CE if they feel there has been wrongdoing.
In addition I would also offer my opinion that people might want to contact and file statements with their local RCMP Commercial Crimes Division if they feel there has been some criminal wrongdoing at all by CE and any related parties/individuals (fraud?). It is always best in my opinion to ask the questions of the proper authorities as they are well versed in these matters and also have the resources to investigate if they feel there is cause.
With respect to obtaining information on Riaz Mamdani you can certainly google him and find some interesting information including SEC investigations around one of his companies JAWZ Technologies.
Drive around the downtown core especially the surrounding Beltline District and see the ever increasing numbers of “Strategic” signs that seemingly keep springing up on commercial office buildings and in the suburbs on strip malls or his massive development in Sundance Business Park.
I do hope that this situation is resolved for CE investors with positive results in their favour.
April 3rd, 2009 at 12:00 am
Re: The Strategic Group. Again I am not an investor in CE, but have had an arms length relationship with Strategic for a number of years as a subcontractor. While times were good, there was never an issue. Last fall, everything changed. It owes over 8 million on Sundance West alone to the contractor group. The building is finished & rented. Best guess is 3-4 million owed on the 4th street project which numerous magazines did stories on & said Strategic was the Savior, and now sits abandoned. There are numerous liens filed along with statement of claims alleging fraud. When the 8 million was due in November, Strategic closed on a piece of property at Heritage & McLeod with a price on the title of 20 million, & has 8 million equity in it. . . . Hmmmm. There are numerous layers of companies protecting Strategic, including one for each building he has, with mortgages granted to others he owns with first rights, so he ends up with them without paying his bills. He already has companies set up for each of the CE buildings he plans on taking over as per my original post, which were registered in the past two weeks. Check David Parkers’ columns in the Herald, he has the second highest assessed house in Calgary at eleven million, but in fact has a few liens filed against it. Bottom line, highly leveraged & most that know him consider him a vulture. He is also a lawyer by the way, and a made his initial fortune in the technology business, and some research indicates there were charges filed back then over improprieties..
April 3rd, 2009 at 12:00 am
oouuch wrote:
Re: Question – have you people received your T5013’s so you can file your taxes?
I got my form, but the amount on it is $155 higher than what I actually got. I was referred to an accountant, I believe, and she said they used some program that can’t be changed, so they might send out a correction later on. She mentioned that they have been getting calls about this. She could not answer my questions satisfactorily and I told her that this was no way to run a business and that I have absolutely no confidence left in CE.
I could enter the actual amount on my tax return and refer CRA to CE if there are questions. I have absolutely no desire to refile my tax return. Any other suggestions?
It is very plausible that the amount reported on the T5013 and the actual cash received are different, for two reasons:
Firstly, some expenses are recognized at different times for tax and accounting purposes. For example, depreciation is often recorded on the financial statements at a different rate than capital cost allowance for tax. Also things like utility connection costs are recognized faster for tax than for accounting, leaving no deduction later on in the project.
Secondly, cash flow to investors usually isn’t the same as net income. If the project has a mortgage, the principle payments on the mortgage will usually come out of net income. If there was no mortgage, and the entire project was financed by investors, then the cash they receive should be higher than the taxable and accounting income, as the depreciation/Capital Cost allowance won’t affect the cash available to be distributed to investors.
If the project had 1 million dollars taxable income, but had capital cost allowance of 150,000 and debt repayment of 400,000, I would expect the investors should only receive $750,000.
That being said, the financial statements often contain a schedule reconciling taxable income to distributions to investors.
Speaking of that, did they give you actual audited financial statements? I notice from the Castleridge offering memorandum :
Accounting and Reporting to the Limited Partners
The Limited Partnership’s fiscal period will end on December 31. The General Partner will forward to the Limited Partners of the Limited Partnership within 180 days after the end of each fiscal year financial statements for the preceding fiscal period. Each statement will be accompanied by a report of the Accountants thereon as well as all necessary income tax information.
The General Partner must keep adequate books and records of the business of the Limited Partnership. A Limited Partner has the right to inspect the books and records of the Limited Partnership in accordance with the Limited Partnership Agreement. Notwithstanding the foregoing, a Limited Partner will not have access to any information which in the reasonable opinion of the General Partner should be kept confidential in the interests of the Limited Partnership. As a result, the Limited Partner would not be provided access to information the disclosure of which, in the reasonable opinion of the General Partner, would be detrimental to the Limited Partnership for competitive reasons.
So it says they must forward to you financial statements with a ‘report’ by the Accountants. Under Item 5, terms of securities, it says:
(b) The net income or loss of the Limited Partnership for each fiscal period as reported on by the Auditors shall be allocated, at the end of such period, among the Limited Partners based on their pro rata share of Units recorded in the Register.
Thus they ought to be forwarding to you audited financial statements, or if you want to get more literal, the allocations must be based on audited statements, and they must give you statements reported on by the accountants.
I suspect that the OM for the other projects would be the same, as they are probably just copied. I have very strong reason to believe the OM and the LP agreement were copied from Humeniuk’s prior firm (Platinum) – so they don’t contain much room for Concrete to weasel out of their obligations.
I would love to get my hands on an OM and partnership agreement from Telluric to see if they are copied word for word from one of the existing agreements.
Anyone invest in one of the Mexican developments? I suspect there will be some really interesting tax and legal aspects that weren’t covered in the OM.
April 3rd, 2009 at 12:00 am
hellamad wrote:
I am appalled at the behavior of Dave Jones, as reported in your post. However, desperation often brings out the true nature of people.
I am in total agreement with your comments as per holding these people accountable if an audit shows cross contamination of accounts, misuse of money or any other “nefarious” activity. Since the SNC provides solid evidence od deception and practises of lying routinely to investors, an audit is mandated.
The one person who you did not include in your diatribe is Dave Humeniuk. Let us not forget that he was directly involved with the running of the corporation since it’s inception and left the firm in December of 2008. He has had a hand in the development of the mess you now find ourselves…..do not let him fade into obscurity.
It disgusts me how Dave Jones goes on Shine FM and tries to act like such a good christian. I contact shine with my concerns last year, but of course they are the slave to the allmighty advertising dollar, and insisted he was no longer involved.
April 3rd, 2009 at 12:00 am
I have a comment around your investment documents enquiry for Mr. Humeniuk’s new investment offering:
I would think that investment documents (OM) would bear no similarity to any from previous companies that Mr. Humeniuk has been associated with since this new structure as shown is a “Private Mutual Fund Trust”; not Bonds/Shares or Limited Partnerships.
There is no LP Agreement for the investors within this type of structure. Investors purchase “Trust Units” via a Subscription Agreement and are to receive some payment through “short term cash products” (whatever these are-mortgages? chosen at the discretion of Mr. Humeniuk I expect) and eventuallly would supposedly receive payments from tenant rents of commercial buildings once purchased. 100% of the cost of same commercial properties would need to be raised through investors as he claims there would be no mortgages held on the properties.
The information below is taken directly from the Teluric web-site: http://www.realisticreturns.net:
“Private Mutual Fund Trust”
The Teluric Diversified Fund provides ownership in real property by the investors. However, because the investment threshold is as low as $1,000 it is virtually impossible to have every investor listed on title. Raising $6,000,000 could mean that 6,000 names would need to be registered on title which really is not practical. Exits from the fund would require legal documents to be redrawn and refiled each time with legal costs associated with the process. The ownership of the property is demonstrated by a clear path as shown below:
Teluric Diversified Fund
Trust units all held by investors
Funds placed in Trust Accounts until used to purchase property
Funds invested in short term cash products until property purchase finalized
Investors receive all interest from short term cash products
Trust Accounts subject to an independent audit by Deloittes
Property not purchased until cash available to purchase Free and Clear
Unit Certificates issued showing ownership
Net rent paid to fund for disbursement to investors by commercial trust
Flow Through expenses passed on to investors as tax write off
Teluric Diversified Commercial Trust
Units of Commercial Trust purchased by Teluric Diversified Fund
“All” units of Commercial Trust owned by Teluric Diversified Fund
Commercial Trust purchases 100% of Limited Partnership
Limited Partnership pays net rent to Teluric Diversified Commercial Trust
Teluric Diversified Commercial Trust pays net rent to Teluric Diversified Fund
Flow through (soft costs) flow to Teluric Diversified Fund
Limited Partnership
Limited Partnership 100% owned Teluric Diversified Commercial Trust
Limited partnership own 100% of property purchased
Limited partnership operates building
Net rent paid to Teluric Diversified Commercial trust
In this model the investors own the shares in the Teluric Diversified Fund which in turn owns the shares in the Teluric Diversified Commercial Trust which in turn owns the shares in the Limited Partnership which owns the property purchased. THEREFORE THE INVESTORS OWN THE BUILDING THROUGH A STRUCTURE OF A LIMITED PARTNERSHIP AND TRUSTS.
April 3rd, 2009 at 12:00 am
I made an investment in Concrete Equities Mexican El Golfo de Santa Clara property. I guess that at the time I had more money than brains, although this is not the problem now. I was wondering if anyone else had invested in this and what feedback they may have. Real estate in that area has really taken a hit and there are some serious legal land ownership issues there. I recently contacted Concrete who told me that the company is in great shape and that they would be having AGMs on each separate project and of course not to worry.
Anybody else invest in this “swampland”?
April 3rd, 2009 at 12:00 am
It is unfortunate that incidents like these have to occur for people to realize who they are dealing with. Concrete’s high budget advertising campaign should have been the first red flag! It was very evident from their initial launch that the management team had no idea what they were doing, in addition with no real estate experience and did not have the respect of others in the real estate industry. Today, you can look at the number of companies in Alberta that are out there and how many of these management teams actually have any past or positive experience with real estate or investments. This is a very small city and it doesn’t take much to call industry experts or members to confirm projects that were successful and their past performance. I am not saying there are not good companies or good people out there. Recently, a Calgary company was fined for listing projects that they were not even party to. How about the companies that are promoting resort projects in a recession; perfect time to nail down sales! Better yet, a mortgage that pays 12% or 18% on developing land that generates less cash flow than it has to pay. Or the latest I heard was a promote for US real estate and even Hawaii! What experience do these comapnies really have?? Many of these companies are too new to even show a return. The average investment is 3 to 5 years, some of these companies haven’t even been around for 3 or 5 years.
Don’t want to paint every company with the same brush but there are many companies that shouldn’t be out there. We need to really think before we jump into these investment seminars. When there were so many like quinster and myself who did the due diligence and cautioned many of you out there, no one would listen. I hope the CE investors are able to protect their investment.
April 3rd, 2009 at 12:00 am
Last summer I came across this discussion board and was shocked to read your warning about C E since the year before I had become an investor. This was my first investment and I really didn’t know enough about investing to get myself into this. Like so many others I heard D J on my fav. Christian radio station and got sucked in thinking that he must be trustworthy. After reading your post, I came across some others that were giving the same advise- to get out if you can.
I want to thank you for your post, you see I did listen and I did sell my investments before it was to late.
Thank you for sharing your knowledge with those of us who really need it.