{"id":318245,"date":"2025-12-01T10:58:09","date_gmt":"2025-12-01T10:58:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/318245\/"},"modified":"2025-12-01T10:58:09","modified_gmt":"2025-12-01T10:58:09","slug":"n-b-pension-fund-managers-accused-of-costing-tech-investors-millions","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/318245\/","title":{"rendered":"N.B. pension fund managers accused of costing tech investors millions"},"content":{"rendered":"

\"Text<\/p>\n

Listen to this article<\/p>\n

Estimated 4 minutes<\/p>\n

The audio version of this article is generated by text-to-speech, a technology based on artificial intelligence.<\/p>\n

The company that manages billions of dollars in pension funds for thousands of New Brunswick public sector employees and retirees is being accused of causing financial losses for hundreds of investors across Canada.<\/p>\n

Fredericton-based Vestcor Inc. and one of its senior executives are the targets of a petition filed in British Columbia that is seeking court approval for a class-action lawsuit.<\/p>\n

The company is accused of falsely inflating the value of a corporate merger between two technology companies.<\/p>\n

Vestcor invests the pension contributions of New Brunswick civil servants and other public sector employees in various investment vehicles, including stocks.<\/p>\n

According to the petition application, Vestcor was the majority shareholder in Exro Technologies, and \u201corchestrated and significantly influenced\u201d Exro\u2019s 2024 merger with SEA Electric Inc., in which Vestcor also owned shares.<\/p>\n

WATCH | \u2018A lot of people lost a lot of money\u2019:\"\"<\/p>\n

Shareholders pursue lawsuit against N.B. pension fund manager over losses<\/p>\n

Investors allege Vestcor Inc. misled them on value of merger, leading to millions of dollars in losses.<\/p>\n

Exro paid $300 million to acquire SEA Electric after telling its shareholders that SEA would make $200 million in profits in 2024 \u2014 a figure that proved \u201cdelusional,\u201d the court filing says.<\/p>\n

\u201cThese facts and circumstances reflected within those representations were the basis of the grossly inflated valuation assigned to SEA Electric,\u201d it says.<\/p>\n

\u201cThose purported facts and circumstances did not exist, or the manner of their representation in the material change report was false or misleading.\u201d<\/p>\n

\"ASage Nematollahi, the lawyer who filed the petition on behalf of two shareholders, told CBC News that Vestcor ‘has lost a lot of money.’ (Zoom)<\/p>\n

It alleges Vestcor and its vice-president of equities Mark Holleran \u201cdid so in order to manage, or salvage, their significant investment in SEA Electric.\u201d<\/p>\n

The assertions in the petition have not been proven in court and Vestcor has yet to file a response.<\/p>\n

\u201cOur legal team is currently evaluating the merits of this lawsuit,\u201d CEO Sean Hewitt said in an emailed statement.<\/p>\n

\u201cThe claims have not been tested in court,\u201d he added. \u201cWe have no reason to believe in their veracity.\u201d<\/p>\n

Sage Nematollahi, the lawyer who filed the petition on behalf of two shareholders, told CBC News that Vestcor \u201chas lost a lot of money\u201d as Exro\u2019s majority shareholder, tying up \u201csignificant funds from pensioners in New Brunswick [with] this investment that has not done great.\u201d\u00a0<\/p>\n

But in Hewitt’s statement, he said the impact was \u201cnegligible\u201d to the overall performance of Vestcor\u2019s investment portfolios, estimating it at a fraction of one per cent of the total.<\/p>\n

\u201cGiven the robust funded positions of our clients\u2019 pension plans, and continued strong investment performance, there is no impact to the monthly income of pensioners,\u201d he said.<\/p>\n

The company managed a total of $23 billion in 2024 \u2014 an increase of $2 billion over 2023.<\/p>\n

Vestcor, owned by the province\u2019s two largest pension plans for civil servants and teachers, was created in 2016, replacing a government-owned agency.<\/p>\n

It handles retirement plans for hospital workers, nurses, Crown corporation employees, provincial court judges, MLAs and others. It also manages other investment funds, including the University of New Brunswick\u2019s endowment.\u00a0<\/p>\n

Exro was delisted by the Toronto Stock Exchange in October.<\/p>\n

The company revealed in November 2024 that its revenue projections would fall far short of what it had claimed, recording a loss of $226 million, including a $211 million loss to the value of SEA Electric\u2019s assets.<\/p>\n

The losses led to \u201cthe complete collapse\u201d of Exro, the filing says.<\/p>\n

The petition alleges that Vestcor and Holleran \u201cacted in bad faith and\/or conflicts of interest\u201d as \u201cde facto directors and\/or officers\u201d of Exro.<\/p>\n

The petition was filed by two shareholders, British Columbia resident Bryan Irwin, who held $22,000 worth of shares at the time of the merger, and Ontario investor Mike Zienchuk, who had $4 million in shares.<\/p>\n

Nematollahi told CBC News that about 500 other shareholders have contacted his office about joining the lawsuit if it is certified as a class action case.<\/p>\n

\u201cThere could be thousands of shareholders out there,\u201d he said.<\/p>\n

Zienchuk and another investor, Allan Crosier, have also filed a lawsuit in Alberta against Exro, two former company officials, the company\u2019s financial advisors and its insurance underwriters.<\/p>\n

Exro billed itself as a clean tech company that would design and build power electronics to improve the efficiency and cost-effectiveness of electric vehicles and energy storage systems.\u00a0<\/p>\n

Vestcor was a majority shareholder in Exro at the time of the merger and also held 14.3 per cent of preferred stock in SEA, meaning Vestcor was \u201cacting both as a seller and a buyer,\u201d the filing says.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"Listen to this article Estimated 4 minutes The audio version of this article is generated by text-to-speech, a…\n","protected":false},"author":2,"featured_media":318246,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[45,49,48,133,131,132],"class_list":{"0":"post-318245","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-finance","12":"tag-personal-finance","13":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/318245","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=318245"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/318245\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/318246"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=318245"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=318245"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=318245"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}