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December 5, 2005

BAM might get bammed on Stelco, Mon., Dec. 5, 2005, 12:05 AM

On Nov-10-05, Brookfield Asset Management (TSX:BAM)(NYSE:BAM) announced that the company's shareholders approved a change in the company's name from Brascan Corporation.

Brookfield is self-promoted as a specialist asset manager focused on property, power and infrastructure assets, with about $40 billion of assets under management. (Unfortunately Hoovers made a typo and called it $40 million. They also unwittingly made a joke in the lead sentence by saying that Brookfield makes money naturally.)

In my opinion, this group is trying to steal, from Stelco shareholders, another $1 billion. As you know, for reasons that I believe the integrity of capital markets in Canada is at stake, I think the public should not let them get away with this robbery.

And in my view, reputation (or lack of a good one) is why this company had to change its legal name in the past month. There was a taint to the other one, which goes back many years. This is a company that went bankrupt many years ago, as I recall, taking down all the senior officers and directors who had used bank loans to buy their shares. But with some help from friends in high places, there was a plan cooked up that permitted those insiders to wiggle off the hook when cash surrender value of life insurance policies was allowed to be sold to the banks holding the debt.

Once again, perks were extended to the rich and powerful so they could stay housed in tony Forest Hill enclaves, while their kids didn't have to skip a class at Wharton.

In my case, the bank just wanted things like a Rolls Royce and a yacht, but I was a lucky one. There were many others, who owned Fords and Chevs and had no yachts, which the banks did not look so kindly on. Yes, the same banks who decided to cut bait once they had hooked the Brascan people.

So as you surmise, Brascan is a company controlled by a few Canadian white shoes who have friends in high places in government and legal circles. The names at the top might have changed, but it is the same gang and the same modus operandi.

During my Bay Street years, in the 1980's, there were many broker-dealers and mutual funds that refused to deal with them. I suppose nothing's changed, and for good reason.

What goes around comes around. That's why I'm trying to break the circle.

I understand that there are investigative reporters looking into the links between the Brascan Bay Street Boys and people involved in the Stelco charade. If so, I think they don't have far to look.

BAM might get bammed on Stelco. I'm not a stakeholder. I'm not even a shareholder. (Oh, that wasn't funny!)

But, I'm hoping.

Posted by Posted by Bill Cara on December 5, 2005 12:05:39 PM | Category: Canada