ASC Finds Workum and Hennig Breached Securities Laws



    CALGARY, June 10 /CNW/ - The Alberta Securities Commission (ASC) has
found that two former senior officers and directors of Proprietary Industries
Inc. (PPI) contravened Alberta securities laws and acted contrary to the
public interest. An ASC panel found that PPI's former chief executive officer
Peter J. Workum and former chief financial officer Theodor Hennig failed to
make fair, accurate public disclosure of material information during 1998,
1999 and 2000.
    In its decision, the ASC stated that Workum and Hennig "not only fell
profoundly short of fulfilling their respective responsibilities as directors
and senior officers of PPI - responsibilities to their shareholders and to the
investing public generally - but their conduct was the very antithesis of what
is expected, and demanded, of participants in the Alberta capital market." The
ASC panel characterized Workum and Hennig's numerous misrepresentations as a
"web of impropriety" that was "from start to finish, a story of deception,
concealment and manipulation."

    The ASC panel found Workum and Hennig were responsible for:

    
    -   PPI's failure to follow Canadian generally accepted accounting
        principles in the reporting of gains on various transactions in the
        1998, 1999 and 2000 financial statements and in other financial
        disclosure;
    -   PPI's contravention of Alberta securities laws in the structuring and
        public reporting of transactions to produce a misleading impression
        of PPI's financial position and results;
    -   engaging in conduct that may have created an artificial price for the
        securities of Newmex Minerals Inc.;
    -   concealing financial benefits obtained from commissions paid by PPI;
    -   failing to file insider trading reports; and
    -   making numerous misrepresentations to ASC staff.
    

    The panel also found Cheshire Capital Inc. and Strategic Investments Fund
contravened Alberta securities laws. The panel dismissed allegations against
Lexington Capital Corp. and Ashland Holdings Corp.
    In the next phase of the proceedings, the panel will consider whether it
is in the public interest to impose sanctions against Hennig, Workum, Cheshire
and Strategic. A date for these proceedings is to be set on July 18, 2008 at
9:30 a.m.
    A copy of the decision is available on the ASC website at
www.albertasecurities.com.

    The ASC is the regulatory agency responsible for administering the
province's securities laws. It is entrusted to foster a fair and efficient
capital market in Alberta and to protect investors. As a member of the
Canadian Securities Administrators, the ASC works to improve, coordinate and
harmonize the regulation of Canada's capital markets.




For further information:

For further information: For Media Inquiries: Mark Dickey, Senior
Communications Advisor, (403) 297-4481; For Investor Inquiries: ASC Public
Inquiries, Toll Free 1-877-355-4488


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