Abrahams Report June 2003


In the opinion of Frangos, the Payne investigation was “a whitewash” because the investigation was not conducted properly. Payne had reneged on every undertaking, including providing the right of rebuttal to properly test evidence. In order to uncover the real facts, Frangos, through his attorneys, the corporate law firm Webber Wentzel Bowens, appointed Brian Abrahams to conduct an independent investigation. Abrahams operated under the mandate of WWB with no limitations as to scope or time, and examined the same evidence provided to Payne. Abrahams was appointed in mid-February 2003 and completed his investigation with a comprehensive report during June 2003.

The report was submitted to the Minister of Trade and Industry during July 2003 as an attachment to the submission to the Minister of Trade and Industry requesting an investigation into the affairs of Corpcapital, with specific reference to Cytech.

Abrahams Executive summary – findings
Abrahams Appendix I – Treatment of Cytech
Abrahams Review of Evidence – Payne report

Mandate and purpose of the investigation
The central issues
Abrahams Findings
Acting in the interest of shareholders
Are statements made by Mr Frangos justified
The accuracy of Corpcapital’s press release
Did Mr Payne apply his mind properly
Was the Payne investigation independent and was the integrity impaired
Executive Summary

Abrahams Appendix II – Compliance with GAAP and Companies Act re disclosure

Background and compliance requirements
Fair presentation
Annual Financial Statements : Corpcapital year to 31 August 2000
Annual Financial Statements : Corpgro year to 31 August 2000
Annual Financial Statements : Corpcapital year to 31 August 2001
Annual Financial Statements : Corpcapital year to 31 August 2002

Abrahams Appendix III – Disclosure requirements re directors emoluments and options
Abrahams Appendix IV – Comments on Cytech valuations
Abrahams Appendix V – Cytech Revenues Graph
Abrahams Appendix VI – Board compositions
Abrahams Appendix VII – Comments on Corpcapital press release

Mr Frangos’ resignation
Restraint of trade payments
Allocation of shares on formation
Re-pricing of share options
Cash distribution and restructuring of share options

Abrahams Exhibit 1 – Letter of resignation N Frangos 2 December 2002
Abrahams Exhibit 2 – Letter from B Liebmann re proposed board meeting
Abrahams Exhibit 3 – Letter from Liebmann 14 Nov 02 and 18 Nov and to Ellerine 19 Nov 02
Abrahams Exhibit 4 – Corpcapital press release (19 Jan 03)
Abrahams Exhibit 5 – Payne Report
Abrahams Exhibit 6 – The Way Forward
Abrahams Exhibit 7 – Letter from Liebesman of 11 June 02
Abrahams Exhibit 8 – Letter from PE Corporate Services 25 Feb 02
Abrahams Exhibit 9 – Letter from Ellerine 3 Dec 02
Abrahams Exhibit 10 – Letters from Liebmann 17 Oct 02
Abrahams Exhibit 11 – PE Corporate Services
Abrahams Exhibit 12 – Wrap up note to Payne
Abrahams Exhibit 13 – Letter to Payne of 24 Feb 03
Abrahams Exhibit 14 – Letter from Payne of 7 Mar 03
Abrahams Exhibit 15 – Memo to board re Cytech 14 Oct 02
Abrahams Exhibit 16 – Letter from Hamburger 21 June
Abrahams Exhibit 17 – Fax from Hamburger 9 July 02
Abrahams Exhibit 18 – Minutes of Corpgro board meeting 7 Sept 01 
Abrahams Exhibit 19 – Letter to Liebmann 1 Nov 02
Abrahams Exhibit 20 – Frangos summary of Cytech investigation 29 June 02 
Abrahams Exhibit 21 – Stock exchange prices page 1 
Abrahams Exhibit 21 – Stock exchange prices page 2