Royal Group Technologies is a large Canadian building supplies maker and plastics company. Based in Woodbridge, Ontario it also has operations in much of Latin America and in Poland and China. In the 2000s it was plagued by scandals and financial losses.
Woodbridge is a large suburban community in the City of Vaughan, just north of Toronto in Southern Ontario. Situated west of Highway 400 and east of Highway 50, north of Steeles Avenue, and generally south of Major Mackenzie Drive West. It was once an independent town before being amalgamated with nearby communities to form the city in 1971. Its traditional downtown core is the Woodbridge Avenue stretch between Islington Avenue and Kipling Avenue north of Highway 407.
Ontario is one of the 13 provinces and territories of Canada. Located in Central Canada, it is Canada's most populous province accounting for 38.3 percent of the country's population, and is the second-largest province in total area. Ontario is fourth-largest jurisdiction in total area when the territories of the Northwest Territories and Nunavut are included. It is home to the nation's capital city, Ottawa, and the nation's most populous city, Toronto, which is also Ontario's provincial capital.
Latin America is a group of countries and dependencies in the Western Hemisphere where Romance languages such as Spanish, Portuguese, and French are predominantly spoken; it is broader than the terms Ibero-America or Hispanic America. The term "Latin America" was first used in an 1856 conference with the title "Initiative of the Americas. Idea for a Federal Congress of the Republics", by the Chilean politician Francisco Bilbao. The term was used also by Napoleon III's French government in the 1860s as Amérique latine to consider French-speaking territories in the Americas, along with the larger group of countries where Spanish and Portuguese languages prevailed, including the Spanish-speaking portions of the United States Today, areas of Canada and the United States where Spanish, Portuguese and French are predominant are typically not included in definitions of Latin America.
The company was founded as Royal Plastics Group in 1970 by Vittorio "Vic" De Zen. It quickly rose to become one of Canada's largest plastic makers, specializing in PVC pipe, window profiles, and other plastics products. It had its own chemical plant in Bradford, Ontario and a large PVC recycling facility. The company developed the Royal Building System, a construction technique using PVC frames filled with concrete, that allows very sturdy structures to be constructured in only a few days. It also moved into other areas, such as lawn furniture. It also moved into metals with its Baron Metal subsidiary.
Plastic is material consisting of any of a wide range of synthetic or semi-synthetic organic compounds that are malleable and so can be molded into solid objects.
Polyvinyl chloride is the world's third-most widely produced synthetic plastic polymer, after polyethylene and polypropylene. About 40 million tonnes are produced per year.
Bradford is the primary country urban area of the Town of Bradford West Gwillimbury, Ontario, in Canada. It overlooks a farming community, known as The Holland Marsh, located on the Holland River that flows into Lake Simcoe.
The company went public in 1994, and the stock rapidly increased and three years later De Zen's own holdings were worth $600 million. Because of generous stock options some 200 other employees became millionaires as well. In 1997 the company was renamed Royal Group Technologies as sale grew to $2 billion per year.
In 2003 investors began to complain about the company, which was seeing falling earnings. De Zen retained over 80% of the votes at shareholders meeting, and continued to pay himself a multimillion-dollar bonus. The stock price collapsed from over $30 to under $7 in little over a year. Losing money, it placed its money losing window coverings division under new management. In November 2003 De Zen resigned as CEO, being replaced by Douglas Dunsmuir. He remained chairman, and through his stock holdings control of the company. The stock recovered somewhat, increasing in value by over 70% over the next months.
Window coverings are material used to cover a window to manage sunlight, to provide additional weatherproofing, to ensure privacy or sometimes security, or for purely decorative purposes.
However, in February 2004 the Ontario Securities Commission and RCMP announced that they were investigating the company in connection with land deals in the Caribbean. The stock again fell sharply. This caused problems for Greg Sorbara, a former Royal Group board member, who had become Ontario's finance minister in 2003. The investigation focused on De Zen, Dunsmuir and former CFO Gary Brown. It was alleged that the Royal Group has defrauded shareholders [1] in its relation with a resort owned by the executives on the island of St. Kitts. De Zen and his brother in law, Fortunato Bordin, had borrowed $114 million from Scotiabank to build the resort. [2] Scotiabank headquarters were raided by 25 members of the RCMP's Integrated Market Enforcement Team on 1 February 2005 "to collect documentary and other evidence in connection to the ongoing criminal investigation into the financial activities of Royal Group Technologies Ltd. ". [3]
The Ontario Securities Commission (OSC) is a regulatory agency which administers and enforces securities legislation in the Canadian province of Ontario. The OSC is an Ontario Crown corporation which reports to the Ontario legislature through the Minister of Finance.
The Royal Canadian Mounted Police is the federal and national police service of Canada. The RCMP provides law enforcement at the federal level. It also provides provincial policing in eight of Canada's provinces and local policing on contract basis in the three territories and more than 150 municipalities, 600 aboriginal communities, and three international airports. The RCMP does not provide active provincial or municipal policing in Ontario or Quebec. However, all members of the RCMP have jurisdiction as a peace officer in all parts of Canada, including Ontario and Quebec.
Gregory Sam "Greg" Sorbara, is a former politician in Ontario, Canada. He was a Liberal member of the Legislative Assembly of Ontario from 1985 to 1995, and again from 2001 to 2012 who represented ridings north of Toronto in the city of Vaughan. Sorbara served as a cabinet minister in the governments of David Peterson and Dalton McGuinty.
In November 2004 forensic auditors found what was then regarded as a suspicious land deal in Canada in which De Zen and other executives had bought land and then resold it to the company. They found that a 75 hectare lot in Woodbridge had been purchased for $20.5 million and then resold to Royal Group that same day for $27 million. The company fired De Zen as chairman, Dunsmuir, and new CFO Ron Goegan. James Sardo was appointed as the new CEO. The scandal also affected Scotiabank, the company's banker, which was subject to a high-profile RCMP raid in February 2005. [4]
In March 2005 De Zen relinquished control over the company when he exchanged his multiple-voting shares for common stock. This left the company an attractive target for a takeover attempt. It was reported that Cerberus Capital Management was preparing a $1.3-billion bid for the firm. The company put itself up for sale in the spring of 2005. [2]
Georgia Gulf Corporation, a large PVC raw-material manufacturer, completed its acquisition of Royal Group on October 3, 2006 for $1.6 billion. [4]
The trial respecting the allegations made against Mr. De Zen and others commenced in April 2010. [5] Crown prosecutors had sought a jury trial, but the Ontario Superior Court noted that "the Crown engaged in an "abuse of process"" and denied the request. [6]
On December 10, 2010, at the conclusion of the five-month trial, the trial judge acquitted the defendants of the two charges they faced. The trial judge found overwhelming evidence supporting the defence that no fraud, no deceit, no dishonesty and no concealment had taken place. [7] Indeed, the judge indicated that it would be a "travesty of justice" to wait even one day before pronouncing the verdict of not guilty. [8]
