Minimizing corruption
“All institutions are prone to corruption and to the vices of their members.”
—Morris West

“The fight for justice against corruption is never easy. It never has been and never will be. It exacts a toll on our self, our families, our friends, and especially our children. In the end, I believe, as in my case, the price we pay is well worth holding on to our dignity.”
—Frank Serpico, ex-NYC policeman

It is impossible to prevent all corruption but it isn't that difficult to deter much of it. The following may be decried as adding too much red tape or inefficiencies but they are designed to add transparency and that is what's needed to run a clean condo corporation.

The corporation’s by-laws, policies and rules must reflect the following:
1.
You need a minimum of five board members.
(Unless it is a very small corporation.)
2.
Two authorized board members must sign all cheques. Not employees of the property management company.
3.
No one signs blank cheques.
4.
No hand-written receipts will be accepted.
5.
Insist that three written quotes are received for all contacts over a
certain cost.
6.
No dealings in cash. However, when there is other option, written receipts from a numbered receipt book must be given, no matter how small the amount.
7.
The party room and guest suite rentals must be paid by cheque and written contracts must be signed and filed.
8.
All board members must review their printed copy of the monthly and year-to-date financial records as part of their monthly board meeting.
9.
The petty cash fund is audited monthly.
10.
An independent audit company conducts regular audits on the corporation's financial controls.
11.
All owners must be made aware of these provisions.

This is important because you must think about all the directors that will be elected in the future as well as the board that is in office now.

Directors' duties
Every director and officer of a corporation in exercising the powers and discharging the duties of office shall act honestly and in good faith; and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

The evidence provided by the
MTCC # 710 vs Khan lawsuit shows that if any of the three directors would have performed their duties as the Act demands, Khan's schemes may well have been spiked early in the game.

At that time, Jeevandeep Singh Saini, (Bobbi), was President, Hamed Baloutch was the Treasurer/Secretary and Said Duale was Director of Operations.

Control of the money

Hamed Baloutch and Said Duale, two members of the MTCC #710 board stated that the board relied on Khan’s advice regarding payments to be made to service providers and contracts for MTCC #710:

“If Channel or Khan had approved a payment and gave the board a cheque to sign, the board members would sign the cheque.”

The directors did not have the right to delegate their responsibilities to the management company.

Starting in the spring of 2007, MTCC #710 borrowed $5.5 million to fund certain repair work to the condominium. Those funds were deposited into Channel’s bank account at Khan’s direction.

The Treasurer/Secretary gave the condo's treasure to Khan for safe keeping? What the hell? Who in their right mind would have agreed to this?

Just wondering out loud here but what if Khan told the bank he wanted the withdrawals in gold bars, would the directors have helped him load them into the trunk of his car?

No wonder that condo was so easily fleeced.

Signing contracts with unknown companies

It is always a good idea for the directors to do at least some research on the contractors that bid on work.



Do a reverse search on the telephone number. Drive out to the company address and take a look around. It may be a unit in a rental apartment building or a rented mailbox at a UPS Store. It may be a condo that your property manager owns; that is another possibility.

Khan was a director and/or the directing mind of the dummy companies Canali, Mountview, Lakewood, Reliance and PMP.

Khan was a first director of Canali, resigning in April, 2008. Khan owned the condominium unit whose address PMP designated as its registered office. Khan was a director and officer of Mountview and the address for the registered office of Lakeview was the same as that for Mountview.

Anyone looking up companies on Service Ontario and paying eight dollars will get to see the names of the company directors, the company's address and when the company was registered. (Nothing like a company bragging about satisfying customers for the last ten years when you see it was registered just four months ago.)

If any of the three directors did this, wouldn't Khan's fingerprints have shown up everywhere?

The tendering process
Four tenders were received, including one from Canali with a low bid of $1,207,110. Would it not have been prudent to ask all four bidders to make a short presentation to the complete board?

At the very least, why didn't the board ask for the successful contractor to meet with them, even just for a warm and fuzzy meeting, before signing such an expensive contract?

No curiosity?
Curiosity killed the cat
but, satisfaction brought it back
—English proverb

Jim Bezemer was appointed administrator on 07 June 2010. In an affidavit, he states that he was on the job less than two weeks when he discovered that repair work covered by two contracts with Structural Contracting and one with Canali were not complete and further repairs were required.

He further claimed that as a result of his inquiries, he terminated Channel’s management contract three or four months later in the fall of 2010.

Sounds like a no-brainer: take a look around the property, see what was done and compare it to what was paid for. Pretty basic really. So why didn't the directors do that a couple of years earlier?

When the workmen came to work on the property, did none of the three directors take a look at the contractor's trucks. Did the trucks not have a company name and phone number written on the sides? If not, did they ask why not?

Did they not ask the workers who did they worked for? If they said Wall Savers, wouldn't that ring a bell or two? A few more questions would be in order would it not?

How about the other contracts? If invoices show up for work done and you go outside and see no signs that anything was done, wouldn't that seem a little suspicious? Wouldn't a prudent person exercising care, diligence and skill telephone the engineering company and ask them about the invoices?

full knowledge, consent and agreement

Khan's defence
In their defence Khan and Channel admitted that they received a profit but “with the full knowledge, consent and agreement of the board of directors at the time.”

Duale and Baloutch denied that MTCC #710 was aware that Khan or Channel received a profit “nor did the board consent to, or agree to, Khan and Channel receiving a profit.”

Just wondering
Why didn't the corporation submit an affidavit from Bobbi, who was the President at the time? I have been told that soon after the second loan was approved he sold his unit and moved into a house. Even so, I would think that as the ex-President, his testimony would have been very enlightening.

The owners
It was the owners who were the first to figure out that they were being robbed. They tried to remove the board and ended up with an administrator instead. That is when Channel's stealing stopped.

Owners should become very alarmed when the manager and board refuses to allow them to inspect the corporation's documents. If that happens, they should take immediate steps to replace the directors.

Either that, or it's time to sell and get off title.

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