BC company director fined $500,000 by BCSC

The BC Securities Commission says the bonds are “probably worthless because there is no market for the securities they purchased, which proves that these securities have present value in the future.”

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The BC Securities Commission has ordered the administrator of two BC companies to pay a $500,000 fine for illegally issuing bonds in the companies’ names.

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According to the decision, Winter Huang (also known as Dong Huang) was in charge of Pegasus Pharmaceuticals Group Inc. and Careseng Cancer Institute Inc when Pegasus issued bonds worth US$45 million to investors. in Taiwan between 2010 and 2012.

Careseng has guaranteed the principal of 447 of these bonds worth $12.8 million.

When a company issues a bond to investors, the investor buys the bond and receives what amounts to interest payments for the term of the bond, in which case the company must return the money to the bond. obligation. So effectively the company is borrowing money from the investor.

The decision states that the bonds were issued without a prospectus, a document that explains the investment and the risks involved.

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Huang said he was unaware that BC securities laws applied to his companies because all of the investors were residents outside of Canada.

The BCSC said the bonds were now “probably worthless because there is no market for the securities they purchased or evidence that those securities have present or future value.”

Careseng has since disbanded, while Pegasus has not generated any income since 2015 and its only asset is a property in Richmond.

“The potential sources of funds to repay investors identified by Pegasus are all speculative at this stage, as the projects from which these revenues are to be derived are either on hold, in development, or require additional investment,” the BCSC said.

The ruling goes on to say there was no evidence that Huang was enriched by his misconduct.

Huang is banned from various market activities until he pays the fine, while Pegasus is banned from trading in securities or engaging in promotional activities for 10 years.

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