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Paul Jenkins, one of 14 defendants embroiled in a $50-million lawsuit related to the province’s e-gaming scheme, believes his business partners used him for his P.E.I. contacts, who then “began to leave [him] out of the loop.”
In an affidavit filed late last week, Jenkins, who was the sole director of a subsidiary of Capital Markets Technologies Inc., the company that initiated the politically explosive lawsuit, paints a picture of a deceptive business relationship from which he was often sidelined.
In the affidavit, Jenkins claims Paul Maines, the president of CMT, and Gary Jessop, a director of CMT, were largely the decisionmakers for the company’s activities and in the end were “the authors of their own misfortune.”
Following a securities investigation in 2013, CMT and its P.E.I.-based subsidiary, 7645686 Canada Inc., were sanctioned for the illegal distribution of securities. The company reached a settlement in which they paid $15,000 in fines.
Since that time, CMT has initiated a sprawling $50-million lawsuit against the provincial government and 14 other defendants. The cast of defendants includes Jenkins, former premier Robert Ghiz, former finance minister Wes Sheridan, current deputy finance minister Neil Stewart and several P.E.I.-based lawyers. Between 2010 and 2012, CMT had attempted to work with the province to establish a financial services platform for a regulatory regime of online gambling operations.
In a statement of claim filed in June on behalf of CMT, Jenkins is portrayed as a key figure who drew Maines to P.E.I., and established connections with local business and political figures. The statement accuses Jenkins of breaching his fiduciary duty as director of 7645686 Inc. The lawsuit claims Jenkins disclosed proprietary information and made false claims about CMT during the securities investigation.
In his affidavit, Jenkins claims that he was misled about the terms of a $100,000 loan he made to CMT in 2011, and that the loan was never repaid. He also claims he is owed $41,614 in expenses paid while he was working on behalf of CMT.
In a previous statement of defence, filed on June 25, 2018, Jenkins states that, at the time, he “did not understand that he would be the sole of permanent director of 7645686.”
In the recent affidavit, Jenkins does not make this claim, but states several times that he was the sole director.
Jenkins claims most decisions regarding the company were made by Maines and Jessop and that he was “left completely in the dark.”
Jenkins outlines the point in which his relationship with Maines began to sour. He describes an incident in which Maines left a confidential report about the e-gaming initiative in the office of a Scotia MacLeod employee. Jenkins said he found out about this after receiving an angry phone call from then-finance minister Wes Sheridan.
“This incident led me to two conclusions. The first was that I couldn’t rely on Maines’ word. The second was that I couldn’t rely on Maines’ judgment,” Jenkins states in the affidavit.
Jenkins notes that the confidential report, which was prepared for McInnes Cooper, bears the name and logo of the government of P.E.I. McInnes Cooper was retained at the time to represent the Mi’kmaq Confederacy of P.E.I. as part of the e-gaming initiative. The report is included with the affidavits filed by Jenkins.
A 2016 report prepared by P.E.I.’s auditor general states McInnes Cooper denied acting on behalf of the provincial government on the e-gaming initiative.
Jenkins has requested the claims against him be dismissed. None of the claims have been proven in court.