Canadian connection at issue
Class action against
NASDAQ listed company
gets Ontario green light
A group of disgruntled shareholders will be allowed to proceed with a class action lawsuit
against Canadian Solar Inc., after
a recent ruling by the Ontario
Court of Appeal.
The shareholders alleged that
the Guelph, Ont.-based company
made false and misleading statements about its financial results
in public statements and various
documents filed with securities
regulators in the United States.
The Court of Appeal in its ruling in Abdula v. Canadian Solar
Inc. 2012 ONCA 211, rejected the
company’s arguments that the
lawsuit should be quashed
because it is not a “reporting
issuer” of publicly-traded shares
under the terms of the Ontario
Securities Act, nor is it a “
responsible issuer” because its stock is
traded on the NASDAQ exchange
in New York City.
“The company argued that
because it is only listed on a U.S.
stock exchange only U.S. securities law should be applied,” said
Dimitri Lascaris, a partner with
London, Ont.-based Siskinds
LLP, and the lawyer for Tajdin
Abdula and several hundred
shareholders who have sued Canadian Solar. “They said the dispute is a matter for U.S. securities
regulators and should not be of
any concern to regulators up here.
“The Court of Appeal has said
very clearly that even if their shares
are traded on a foreign stock
exchange, Ontario law will apply if
the company has a real and substantial connection to Ontario, as
this company unquestionably
does,” Lascaris said.
Canadian Solar was established in Ontario in 2001 and
touts itself as one of the largest
manufacturers of solar panels in
the world with sales in 2010 of
$.1.5 billion (U.S.). The federally-incorporated company operates
in nine countries, including the
United States, Germany, South
Korea and Australia, and owns
seven manufacturing subsidiaries, most of them located in the
People’s Republic of China.
The company went public in
2006 with a stock offering issued
through the NASDAQ, where its
shares currently trade. Abdula, a
resident of Markham, Ont., purchased some of that initial offering through his discount brokerage. According to the appeal
court ruling, there were 1,253
Canadian Solar shareholders
residing in the province as of
Continued From Page 2
BREAKERS / DREAMSTIME.COM
Canadian Solar Inc. is traded on the NASDAQ, but it was found to have a ‘real and substantial connection’ to Ontario.
The Court of Appeal has said very clearly that even
if their shares are traded on a foreign stock
exchange, Ontario law will apply if the company
has a real and substantial connection to Ontario,
as this company unquestionably does.
Dimitri Lascaris, Siskinds LLP
August 26, 2010 and, cumulatively, they owned over one million shares.
“The action arises,” according
to the decision written by Justice
Alexandra Hoy, “out of alleged
misrepresentation contained in
press releases, financial state-
ments and an annual report
released or presented by Can-
adian Solar in Ontario and made
in the course of investor confer-
ence calls. Mr. Abdula alleges
that Canadian Solar materially
overstated its financial results.”
The company is not required
to meet the filing and disclosure
requirements of a “reporting
issuer” under the Ontario Secur-
ities Act since its shares are
traded on an American exchange.
The question before the court
was whether Canadian Solar
could be considered a “respon-
sible issuer,” which is defined
under Section 138.3 of the act as
any issuer of publicly-traded
stocks with “a real and substan-
tial connection to Ontario.”
Lawyers for Canadian Solar
argued that the definition of a
responsible issuer only covers
companies whose stock is traded
in Canada and in other provinces
with securities legislation that
parallels Ontario law.
in addition to random road stops,
which is already in place in countries such as Australia.
Jennifer Penman, who represented Luskin, suggested the
sentence imposed by Justice
Trotter was appropriate. “If you
look at Kummer, the facts are
virtually on par,” said Penman, a
partner at Derstine Penman. She
suggested it reflects the “moral
blameworthiness” that courts
have attached to this offence.
While Penman and other
defence lawyers agree that
impaired driving sentences are
on the rise, even with multiple
deaths they tend to be no more
than what drug couriers receive
and lower than for many people
convicted of manslaughter.
The same month Luskin was
sentenced, Ontario Superior Court
Justice Susanne Goodman
imposed an eight-year term against
a 37-year-old Jamaican woman
convicted of trying to smuggle 3.5
kilograms of cocaine into Canada.
The woman had a past conviction
for “dealing in ganga [sic] and taking steps preparatory to export
ganga,” noted the judge in R. v.
Robinson, 2012 ONSC 1613.
In a high-profile Toronto
case, John Magno was convicted
of manslaughter and sentenced
to 12 years last August by Justice Todd Ducharme for orchestrating a plan to burn down the
family’s building supply store.
The arson was botched and
Magno was convicted in the
death of the person he hired to
set the fire, who died when the
building exploded prematurely.
Jonathan Rosenthal, a Toronto
director of the Ontario Criminal
Lawyers Association, pointed out
that in Magno there was a pre-
meditated plan to burn down a
building, while there is no crim-
inal intent by an drunk driver. “No
one says I am going to go out and
get drunk and commit a criminal
offence [of impaired driving].”
The reason sentences may be
lower than for other offences is
that the “moral blameworthi-
ness” is the same for an impaired
driver stopped at a RIDE check
and one who ends up in a fatal
accident, Rosenthal said. “You
get a fine for one, you go to the
penitentiary for the other.” n
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