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January 16, 2006 at 07:00 PM
TEL AVIV, Israel (HedgeWorld.com)–This time the judge really, really means it.
A judge in Israel on Monday [Jan. 9] gave Boaz Manor, the founder of the now defunct Canadian hedge fund Portus Alternative Asset Management, seven days either to produce US$10 million in diamonds he bought with money from the hedge fund, or pony up the cash.
According to a report in the Toronto Globe and Mail, if Mr. Manor fails to do either, he’ll spend a week in jail. Followers of the Portus saga might recall that an Israeli judge issued a similar order in December, only then Mr. Manor had three days to comply.
Mr. Manor then filed an affidavit saying he didn’t have the diamonds and offered to testify in court, which he did for more than two hours on Dec. 26. After the questioning, conducted during a hearing that was not open to the public, nothing happened. Mr. Manor returned to court on [January 9], and the same judge issued the new order.
KPMG LLC, the court-appointed receiver for Portus, has alleged that Mr. Manor wired US$10 million in Portus funds to Hong Kong in the summer of 2005 to buy about 100 diamonds. His sister-in-law was supposed to pick them up. This transaction occurred after Mr. Manor had been ordered by Canadian courts not to have anything to do with Portus assets.
The receiver has hit numerous walls in its attempts to recover C$750 million (US$634 million) in assets belonging to roughly 26,000 investors, most of whom were Ontario residents. The biggest obstacle has been getting information from Mr. Manor. He left Canada for Israel early in 2004, shortly after regulators started looking into whether Portus had been selling shares to non-qualified investors and paying off investment advisers to refer clients to the fund.
