PITTSBURGH An Ontario metal recycler, exporter and auto shredding facility has been put into temporary receivership under the Canadian Bankruptcy and Insolvency Act for defaulting on Canadian $17 million ($15.8 million) in loans.
The affairs of 1650473 Ontario Inc., also known as Scrapmen & Boparai Trading Co., along with 2328247 Ontario Inc., also known as Canada Steel, which operate at the same location in Hamilton, are both owned by Rantej Boparai, according to documents filed in the Ontario Superior Court of Justice. Duff & Phelps Canada Restructuring Inc. has been named interim receiver for the business.
The court documents indicate that two companies are in default on approximately C$17 million in loans from the Bank of Montreal, which asked the court to appoint a receiver because it said it was concerned that the debtors would try to remove assets from the property.
The bank said it hired a company in December to conduct a field examination, but the field exam team was unable to secure many financial documents it requested from the owner.
Security hired to monitor the facility noticed a person loading a vehicle with cardboard boxes that were taken out of the company office, according to the court filing.
During his audit, the examiner found a "number of inconsistencies and questionable activities on part of the debtors," according to the banks, including the lack of activity in a bank account from January through October 2013. Since the examiner was not provided information requested, he raised concerns that the accounts receivable were overinflated or that money received from customers was being used inappropriately, according to court papers.
The examiner said in an affidavit that he noticed a C$48.6-million discrepancy between cash receipts reported by the company and cash deposits into two bank accounts.
Another unusual activity, according to the examiner, was that an Indian company made multiple wire transfers into the account on the same day. "It seems very odd that the same company would make two wire transfers on the same day to the same company," the examiner wrote.
Neither Boparai nor the companies could be reached for comment.
The presiding judge is expected to decide as early as Jan. 8 whether to move the interim receivership into receivership.