[SLJB]: Windsor Star Dec. 30th article: Sulja Bros. faces charges

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Sulja Bros. faces charges

Security commission hammers Harrow lumber firm

The Ontario Securities Commission (OSC) announced a series of securities charges Friday against Sulja Bros. Building Supplies Ltd., a Harrow-based company, as well as a Nevada-incorporated company of the same name and its former CEO Petar Vucicevich.The trading of the company's stock in Ontario was also temporarily halted by the OSC, pending a Jan. 8 hearing in Toronto which will deal with allegations of improper trading and false or misleading statements made in company news releases over the past four months.

Also named in the OSC allegations is a San Antonio, Tex. native, Andrew DeVries, who was described as an associate of Vucicevich in both Sulja Bros. and a separate company, Kore International Management Inc., which launched a $20-million land assembly and commercial development a few months ago in Colchester Village.

Vucicevich couldn’t be reached Friday. Steve Sulja, CEO of Sulja Bros., didn’t return a call for comment.

The OSC charges didn’t halt the trading of Sulja in the U.S. over-thecounter penny stock market Friday, although the price did drop about 16 per cent to a little over a cent a share. About 36 million shares were traded Friday, almost double the average daily trading volume for the stock.

Sulja Bros. has been a hot stock in the penny markets over much of the past year, trading as much as 171 million shares in one day and with the share price peaking at about 21 cents.

According to the notice of hearing from OSC secretary John Stevenson that was made public on the commission’s website Friday it is alleged that:

• Vucicevich set up trading accounts at two Canadian discount brokers using employees of Kore or members of the Sulja family;

• Between August and November, Vucicevich and DeVries directed the sale of Sulja Bros. stock through the trading accounts with instructions of when to trade and at what prices;

• The proceeds of the trading in Sulja Bros. stock through those accounts raised about $7.8 million;

• The trading directed by Vucicevich and Devries “created a misleading appearance of trading activity and an artificial price” for the shares of the Sulja stock;

• Large numbers of Sulja Bros. shares were sold without a preliminary prospectus or prospectus as required by Ontario securities laws;

• The false or misleading news releases issued by Sulja Bros. included claims of a cement deal in the United Arab Emirates with Ramada General Contracting being closed on Sept. 5 that would bring in annual revenues of $3.5 million;

• Another false company claim, according to the OSC statement of allegations, was that KPMG or PriceWaterhouseCoopers were being hired to audit some of the company’s transactions or do its financial statements.

Jim Bishop of Vancouver, a veteran of the penny stock markets who has been posting warnings about the risks of the companies for more than a year in various internet investment forums, wasn’t surprised by the OSC actions.

The series of eye-opening press releases in recent months that talked of US$350-million cement deals or a US $645-million hotel project from a company whose main asset appeared to be a lumberyard in Harrow should have raised questions, he said.

The UAE brokerage company mentioned in the OSC allegations said in an interview with The Star that it never closed a $350-million cement deal in September with Harrow-based Sulja Bros.

“We never had a contract,” said Hazem Hamaidi, general partner of Ramada General Contracting, reached by telephone in Abu Dhabi, UAE.

Hamaidi and his partner Saleh Khateeb said they were completely unaware that Sulja Bros. issued a news release Sept. 5 claiming to have closed a major contract with Ramada.

Hamaidi, who speaks English, and his partner Khateeb, were interviewed through Windsor Arabic translator Nazer Marar. The partners said various deals were discussed in some telephone calls and email correspondence, in July and August, but nothing came of it.

Vucicevich was questioned in mid November by RCMP working for an intelligence unit in cooperation with the OSC about Sulja’s stock and claimed then he had nothing to hide.

http://www.canada.com/windsorstar/news/story.html?id=0e2594b2-ac91-4f38-ab42-b2164bbc297d




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