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None of your business
Foreign investment fund treated as top secret
by Jeff Colbourne and Doug Ashbury
NNSL (Nov 03/97) - A little-known venture capital fund has generated millions of dollars for the North. But just who's benefiting is a secret -- the territorial government won't divulge who is being loaned money. The fund was launched as Canada's NWT Government Aurora Fund (1996). The second edition is named Canada's NWT Government Aurora Fund II. Foreigners pay $250,000 to the fund for a fast-track to Canadian citizenship. The first fund, which closed a success, generated around $33 million, which can be loaned to qualifying Northern companies. And the second fund, which will close at the end of the year, is moving along at the same popular clip as the first. Forty-three individual investors from China, Taiwan, Korea, Hong Kong and Europe have signed on with Aurora Fund II, according to the GNWT Finance Department's manager for financing and reporting, Carl Bird. Each of these 43 people has committed various amounts of capital ranging from $10,000 to the maximum $250,000, said Bird. Eleven of the group have transferred the full $250,000. The fund cannot be used to re-finance a business nor can it invest in residential properties. Government does not derive any profit from the fund and the risk lies with the individual investor. Only after 14 investors have bought into the fund, can the money can be distributed as venture capital. Because of confidentiality rules, fund managers will not divulge who is getting the venture capital. There is scrutiny by the federal government, however, as the information is reported to Immigration Canada, Bird said. The Aurora Fund has been incorporated as a society and has members instead of shareholders, with each member acting as a director. John Todd chairs the society, Stephen Kakfwi is the vice-chair, Lew Voytilla is president, Andrew Gamble holds the post of secretary-treasurer and Don Cooper, William Thomson, Douglas Bachman and Jonathan Taylor are member-directors. In the last sitting in the legislature, Iqaluit MLA Ed Picco wanted to find out more about the fund but Todd said nothing on where the funds are going. Picco said the fund should be more "transparent" to the public. "It seemed to me people did not know about the fund," he said. Immigration Canada spokesperson Denis Boucher said the funds are monitored regularly. "The monitoring occurs after the investor deposits the full $250,000," he said. The only loser in the deal could be the investor. "Like any other fund there can be losses. And there are losses," Boucher said. Since 1986, $3.8 billion has been poured into the Canadian economy through venture capital funds.
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