On the 6 December 2012, BU received a letter from Ontario counsel Mr Sean Campbell of the law firm DAVIES WARD PHILLIPS & VINEBERG which advised they are acting on behalf of Eugene Melnyk as follows:
Dear Sirs/Mesdames:
We are counsel for Eugene Melnyk.
It has come to our attention that Barbados Underground is disseminating information that is false and defamatory and that this is causing substantial damage to Mr. Melnyk’s business interests and reputation. Without limitation, Barbados Underground is disseminating an article entitled “Senators-owner Eugene Melnyk & Founder Of Biovail Charged With Fraud”, dated March 24, 2008 and comments related to that article. A copy of the article and comments are enclosed. Among other things, the article and certain comments falsely allege that Mr. Melnyk has been charged by regulators in Canada with accounting fraud. This allegation is manifestly false and defamatory. Mr. Melnyk has never been charged by any Canadian regulatory authority with fraud.
Our client considers this matter to be very serious. We have been instructed by Mr. Melnyk to demand that you immediately remove the above referenced article and related comments from your website. We further demand that you cease and desist from making or disseminating any further false or defamatory statements concerning Mr. Melnyk and from any other conduct that is damaging to Mr. Melnyk’s business interests or reputation. In the event that you fail to comply with this demand, legal proceedings will be initiated against you and any other involved parties without further notice.
Please contact me in the event that you wish to discuss this matter.
This letter is written under reserve of all our client’s rights and recourses.
Yours very truly,
Sean Campbell
BU has responded as follows:
Dear Sirs/Mesdames:
We have your letter dated 06 December 2012 sent to us via e-mail.
We note that the report that it complains of was taken directly from a report in http://www.canada.com and, for your ease of reference, can be found at the following link. Our report credits and hyperlinks www.canada.com as to source and content. We note that the website is owned by CanWest MediaWorks Publications Inc.
We further note that this report continues to be posted online.
If you would be so kind as to advise us as to when (and if) the report of http://www.canada.com is withdrawn, we shall be happy to withdraw our report, until which time we continue to view our reporting of the http://www.canada.com report as of national interest to the people of Barbados and we so advise, by copy of this and your letter, WordPress. Additionally, we advise and copy the office of the US Secretary of State, who takes a very personal interest in attempts to unjustifiably muzzle or intimidate the blogs.
We recommend to you the 2011 Canada Supreme Court case of Crookes v Newton which, so far as we are aware, has not been overturned or set aside. BU carried a report on this case in which it hyperlinked to the Canadian Broadcasting Corporation. You will unearth it on our website at this link.
Please also be advised that we ourselves do not give way at any time to meritless intimidation FROM ANYONE. Accordingly, BU will be advancing this matter to our website a copy of your said letter to us and this, our reply to you.
We shall not respond to any further correspondence or proceedings from you in this matter. The bottom line is that if you produce to us hard and incontrovertible evidence that the hyperlink we have posted has withdrawn the report, we shall do likewise.
As a result of this letter from Mr Melnyk’s Ontario counsel, BU has browsed the Internet courtesy of Google and has unearthed the following references to the issue:
From these, BU ascertains that indeed Mr Melynk was NOT charged with fraud in Canada. But he WAS so charged, according to the comments of the US Securities Exchange Commission, in the USA for essentially the same offenses that the Canadian authorities did not charge him for, opting instead for lesser charges. If our justice system actually worked in Barbados, what charge would he have faced for the same thing here? No prizes for guessing.
The first of the Google-searched references above is an Order under section 127 of the Ontario SECURITIES ACT,R.S.O. 1990, c. S.5, as amended, which, inter alia, severely restricts the involvement of Mr Melnyk in certain activities related to securities in Ontario for a period of five (05) years as at 2011. For specifics, please refer to the Order above.
The second and third links are to the Globe and Mail newspaper and are most illuminating and we recommend them to our readers.
It is specifically noted that:
“Mr. Melnyk wrapped up similar legal matters with the U.S. Securities and Exchange Commission, agreeing to a five-year ban as a director or officer of a public company in the United States, and agreeing to pay $150,000 (U.S.) in penalties.”
It is noted that the same 5 year ban is in place in Ontario.
Wikipedia (as linked above) reports:
“In 2003 a Biovail trucking accident destroyed a shipment of drugs, and Biovail executives overestimated the loss. When the actual earnings were released, the loss was much lower and earnings were positive. This caused shareholder frustration and legal actions. Although the Ontario Securities Commission in Canada found that Eugene Melnyk didn’t violate any of the province’s securities laws in the way he handled an earnings warning at Biovail in 2003, on May 2011, the OSC settled with Eugene Melnyk; the settlement prevents his taking senior roles at public companies in Canada for five years and imposes a $565,000 fine. Earlier in the same year Melnyk had settled with the United States Securities and Exchange Commission (SEC), agreeing to pay a civil penalty of $150,000 US, and he had previously paid $1 million U.S. to settle other claims with the SEC.”
Mr Melynk is, of course, best known in Barbados as the owner of a disqualified Gold Cup winner. The horse was disqualified and stripped of its title when the presence of illegal substances were discovered in it post race. The matter was recently the subject of a Caribbean Court of Justice decision with Mr Melynk being represented legally by Mr Alair Shepherd QC and the Barbados Turf Club by Mr Vernon Smith QC and Mr Hal Gollop.
BU is advised that Mr Melnyk has not seen fit to return the Gold Cup trophy to the BTC, despite the disqualification of his horse.
BU has long declined to publish defamatory or needlessly damaging information on individuals and it takes only a reasonable and plausible explanation to BU as to why it should desist or withdraw a blog or comments. After all, the BU family are human beings as well and would do anything rather than cause unnecessary problems. However, when a matter is in the public interest of Bajans, as this is, BU will not give in to threats from anyone. The proposition that, although charged with fraud in the USA, Mr Melynk was not so charged in Canada and therefore the hyperlink has produced a situation where “Barbados Underground is disseminating information that is false and defamatory and that this is causing substantial damage to Mr. Melnyk’s business interests and reputation” is disingenuous to an unacceptable degree.
The subject under discussion here on this report is the attempt by Mr Melnyk to suppress what is in effect a hyperlink to the www.canada.com owned by CanWest MediaWorks Publications Inc., specifically its article to be found here.
It has been noted in the past in other blogs the propensity of online publications to alter and/or delete articles. Therefore, BU has retained hard copies of the Canada.com article with date of print and reproduces same here as follows:
“Melnyk charged
Canadian and U.S. regulators slapped Biovail Corp. founder Eugene Melnyk and three company executives with charges of accounting fraud, saying they misled investors about the pharmaceutical company’s financial results.
March 24, 2008
Canadian and U.S. regulators slapped Biovail Corp. founder Eugene Melnyk and three company executives with charges of accounting fraud, saying they misled investors about the pharmaceutical company’s financial results.
The U.S. Securities and Exchange Commission said Canada’s biggest publicly traded drug maker agreed to pay $10 million US to settle charges against the company.
But the stock market regulator said it will press on with its case against Melnyk — the billionaire owner of the Ottawa Senators hockey team — as well as Biovail’s former chief financial officer Brian Crombie, its current chief financial officer Kenneth Howling and controller John Miszuk.
“Biovail and senior executives engaged in a pattern of systemic, chronic fraud that impacted its public filings of quarterly and annual reports over the course of four years,” Mark Schonfeld, director of the SEC’s New York regional office, said in a statement. “In an effort to conceal the fraud, Biovail’s senior officers intentionally misled the company’s auditors and the investing public, showing their complete disregard for their responsibilities to shareholders.”
Meanwhile, the Ontario Securities Commission also announced that it has slapped the four men with regulatory charges over allegations they misled analysts and investors.
None of the allegations has been proven.
Updates to come.”
BU’s position is that it has committed no defamation in hyperlinking to the article. BU has since removed comments only in so far as they relate to Mr Melynk’s private life, as these are intrusive and irrelevant. By the way, the original hyperlink was posted to BU in 2008 and received 10 comments only and scant attention.
As has been clearly demonstrated in the past, BU will unhesitatingly side with any blog on which bully boy tactics are attempted, even if it is Barbados Free Press (BFP) – indeed, on the sole occasion that BU did take up cudgels on this issue – it was on behalf of BFP, believe it or not. Reciprocation is, of course, not anticipated.
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