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Message: CEO has an interesting history

CEO has an interesting history

posted on May 22, 2009 01:16PM

http://www2.canada.com/vancouversun/...

Extracted from The Vancouver Sun 2006

There's more here than a two-bit miner and a golf cap

David Baines, Vancouver Sun

Published: Saturday, November 18, 2006

John (Jake) Fiddick is senior commercial services manager at the Vancouver main office of the Bank of Montreal. He specializes in providing commercial services to public companies, so he should know a thing or two about the stock market.

Which is why I did a double-take earlier this year when I saw that he was moonlighting as the president and chief executive officer of Crawford Lake Mining Inc., a two-bit mineral exploration company that trades on the OTC Bulletin Board in the United States, the rathole of North American equity markets.

"We will be engaged in the acquisition and exploration of mineral properties with a view to exploiting any mineral deposits we discover," stated the company's registration statement, which was certified by Fiddick and filed with the U.S. Securities and Exchange Commission.

I didn't believe it. It seemed highly unlikely that this career banker -- who, according to the registration statement, doesn't have "any professional training or technical credentials in the exploration, development and operation of mines" -- was going to turn his hand to mineral exploration, especially with this company.

Crawford Lake owns a single mineral claim in Ontario, which it acquired for the grand sum of $7,000. Geologist Scott Jobin-Bevans recommended a two-phase exploration program, the first phase budgeted at only only $5,000, which is hopelessly inadequate for any serious exploration program.

I wondered whether Fiddick was simply a nominee for the real promoters, who were hiding behind the scenes. Certainly, Fiddick would know a lot of them in his banking capacity. However, I was unable to confirm this. Fiddick did not return my calls.

According to financial statements for the period ending April 30, 2005, the company had total assets of only $20,656, which was raised by selling several million seed shares at prices ranging from one-tenth to 10 cents each to just over two dozen shareholders.

I contacted several of these shareholders to try to determine whether they were, in fact, arm's-length shareholders, or merely nominee shareholders who had pre-arranged deals to sell back their shares to the people behind the scenes once the company went public. Most were evasive, some were hostile, all refused to answer.

The company's financial statements were audited by the Vancouver chartered accountancy firm of Cinnamon Jang Willoughby & Company. To its discredit, the firm filed a form with the SEC consenting to the use of its audit report for the going-public process. Given the way Crawford Lake had been structured, it ought to have known that this was not an earnest endeavour.

Heightening my suspicion that this was all a big set-up was the fact that the registration statement had been prepared and filed by Vancouver lawyer Greg Yanke, who is one of the key legal facilitators in the Vancouver shell-manufacturing business.

The real purpose of this endeavour began to emerge on Aug. 17, when Fiddick suddenly decided that he didn't want to go into the exploration business after all, and tendered his resignation. That same day, Crawford Lake acquired Jinan Yinquan Technology Co. Ltd., a Chinese joint venture involved in the development and provision of Voice over Internet Protocol services. Purchase price was 40 million shares, which gave the Chinese owners control of the company.

Now this was an infinitely more promotable deal. Since the takeover, the company's share price has climbed to $2.49 US, for a total stock market value of $56 million US, with little apparent promotional effort and on thin trading volume. While this may suggest that demand is strong, the more likely scenario is that supply is being tightly controlled.

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