On file with BC Auditor General ~~~~~~~~~~~~~~~~~~~~~~~~~~
British Columbia Auditor General 8 Bastion Square Victoria, BC V8V 1X4
February 27th, 2004
To the Honourable British Columbia Auditor General Wayne Strelioff;
Can a company in the same original sales transaction agreement arrange both the selling and then the repurchase of the same asset, and then demand goodwill equity tax credits?
The British Columbia Auditor General is requested to judge whether Bell Canada Enterprises violated GAAP with their goodwill book value equity claim of $5.4 billion on their reacquisition of 20 percent of Bell Canada.
A seller cannot arrange the buy-back details when selling the original asset, and then assert that the buy-back of the asset was a separate arms-length-transaction from the original sales contract, and demand investment goodwill tax credits This novel goodwill precedent could undermine GAAP and Revenue Canada.
In June 1999, SBC Communication Inc. / Ameritech supposedly bought 20 percent of Bell Canada for $5.1 billion from Bell Canada Enterprises(BCE). The sales transaction contract included a return clause. SBC began exercising this prearranged return clause in June 2002. SBC�s wishes had to be honoured. BCE had no choice but to repurchase this asset. BCE had to return SBC�s money, plus an agreed 1.25 premium, all together totaling $6.3 billion. [It becomes increasingly difficult for Canada�s Audit Authorities to continue their questionable sponsorship and cover-up of this alleged BCE goodwill securities fraud and tax fraud, if the honourable British Columbia Auditor General is on the case.]
BCE�s financial transgressions are a relevant concern for British Columbia. Our province demands that the media making-up the news be honourable and honest. Media conglomerates cannot manipulate the information conduit to misrepresent their financial affairs to the People. British Columbians experience with the media sandbagging the last Provincial Government demand that the owner of CTV not violate GAAP when engaging the savings of British Columbians.
Out of respect to the many important duties and tasks being performed by the BC Auditor General�s Department, the BC Auditor General�s Department is not requested to examine and pass judgment on the alleged omissions of material facts in BCE�s $5 billion 2002 August Prospectus, one of the biggest prospectuses in Canadian history. A host of North American Audit Enforcement Agencies have been commissioned to independently examine and judge whether it was appropriate to leave out and not disclose in BCE�s prospectus the tangible equity consequences for BCE�s balance sheet resulting from the forced 20 percent Bell Canada repurchase. These various independent audit authorities will decide whether BCE�s prospectus should have documented and made transparent the material fact that BCE�s common shareholder tangible equity would become $1.2 billion, after SBC returned their stake in Bell Canada. It wasn�t okay that North Americans invested $2 billion in new shares and had this real equity go up in smoke.
The British Columbia Auditor General�s Department is thanked for contemplating Bell Canada Enterprises� non-arms-length transaction goodwill accounting riddle. Of course, a firm cannot arrange the return details when selling an asset and then on the return of the asset demand goodwill tax credits. The honour of Canada demands that the British Columbia Auditor General finding trouble with this goodwill transaction notify Revenue Canada and the RCMP about BCE�s alleged goodwill securities fraud and tax fraud.
Many Generals looked the other way, BCE a big monster ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Attachments:(letter to BC Auditor General) 1 ibid BCE�s June 1999 Quarterly Report marking the sale of 20 percent of Bell Canada to Ameritech for $5.1 billion, no refund issue disclosed 2 ibid BCE�s Fourth Quarter Report 2002 --Finally, first on SEDAR Feb 3,2003 the $5.4 billion goodwill charge is disclosed 3 ibid BCE�s $5 billion August 2002 Prospectus Front Page 4 ibid Letter to the Ontario Securities Commission about the serious omissions in BCE�s prospectus[not sent] 5 ibid BCE�s prospectus balance sheet disclosures and consolidated capitalization 6 ibid BCE�s prospectus description of the acquisition of SBC�s minority interest in Bell Canada 7 ibid Auditor Ogilvy Renault issuing their stamp of approval for this huge prospectus 8 ibid BCE�s pays $494 thousand to the Ontario Securities Commission to file their questionable prospectus. 9 ibid BCE�s Fourth Quarter Report 2002 balance sheet declaring after the repurchase of SBC�s stake BCE�s common shareholder equity is $1.2 billion 10ibid Letter notifying the BC NDP that CTV is under investigation 11ibid Letter to the Ontario Securities Commission about BCE�s suspect $5.4 billion goodwill equity claim 12ibid A list of BCE�s company�s -- CTV and local CTV stations, Globe & Mail, Bell Express etc. 13ibid Times Colonist Nov 12, 2002 news story about BCE�s repurchase of SBC�s stake in Bell Canada. CanWest censored any criticism and did not mention BCE�s tangible equity details. 14ibid On the launch of the new TSX web page on April 4, 2002 Bell Canada had their logo inserted onto the TSX home page. Impressive. Stocks should not have access to advertise on the exchange�s home page.