Québec last year discreetly granted $50 million in aid to LMPG, a company one of whose directors is close to the Minister of the Economy, Pierre Fitzgibbon.
In November 2021, Investissement Québec (IQ) purchased $26 million worth of shares in LMPG, the parent company of lighting products manufacturer Lumenpulse. At the same time, the Ministry of the Economy (MEI) acquired $24 million worth of shares in the company.
Pierre Fitzgibbon gave his “authorization” for the payment of the $24 million, confirmed the MEI to the Journal.
LMPG has raised a total of $75 million from this round of financing, said company spokeswoman Marie-Pier Jodoin. The Fonds de solidarité FTQ invested $25 million as part of the transaction, so that all of the sums collected by LMPG in November 2021 came from the government and the Fonds FTQ, which benefits from generous tax credits.
At the time of the transaction, one of the current shareholders and members of the board of directors of LMPG, Michel Ringuet, acted as agent for the trust without the minister's right of inspection.
“The transfer of Mr. Fitzgibbon's trust between Mr. Ringuet and National Bank Trust began in the fall of 2021 to be effective in January 2022,” said Mathieu St-Amand, spokesperson for the Minister.
Furthermore, from 2013 to 2017, Pierre Fitzgibbon himself served as a director of Lumenpulse.
Michel Ringuet acted as agent for Pierre Fitzgibbon's blind trust and was a director of LMPG at the time the minister “authorized” the aid to the business.
“Feeling of suspicion”
“There is a problem of perception and it can be boring if the criteria are not well established […]. If that's the case, it's sure that links like that [between the minister and LMPG] will create even more of a feeling of suspicion,” says Ivan Tchotourian, professor of law at Laval University and specialist in governance.
“It is a direct question of conflict of interest, adds Saidatou Dicko, professor of accounting at UQAM. Even if it is a past relationship, it is a relationship that has been important enough to influence current or future decisions. “
According to her, there is no possible doubt: Mr. Fitzgibbon should not have played a decision-making role in the LMPG file.
“He does not there is nothing in the laws and regulations that prevents him from dealing with this file, but we know very well that in terms of ethics, what is not prohibited by law is not necessarily moral,” she recalls.
Pierre Fitzgibbon, Minister of the Economy
Furthermore, contrary to their habits, the MEI and IQ did not publish any press release to announce this transaction, which is quite significant. The investment also does not appear in IQ's most recent annual report. “One can wonder why there was no announcement, notes Ms. Dicko. Is this an oversight? Is it because we were afraid that it would raise questions? »
Louis Hébert, a professor at HEC Montréal, warns, however, that the government cannot unduly charge LMPG for having Pierre Fitzgibbon as a director. “It is not because one day, a company had as administrator someone who became a minister that it should be barred from all help”, he affirms.
He There is no question of preventing LMPG from receiving state support, Saidatou Dicko stresses, however.
“If the company deserves this funding, a civil servant who has similar skills to those of the minister should come to conclusions similar to his,” she said.
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MEI and IQ's investment in LMPG came less than six months after the company's failed attempt to go public in June 2021. As part of the deal, IQ was to invest $100 million in LMPG, including $90 million to buy back shares held by Power Corporation, the company's largest shareholder. In financial documents made public at the time, we learned that LMPG had accumulated net losses since at least 2018.
In 2020, the company received a loan guarantee of 10.2 million $ from the MEI as part of a program related to the pandemic.
OTHER CONTROVERSIES INVOLVING THE MINISTER
White Star: The Minister held a stake in a White Star fund in which Quebec also invested.
Polycor: Quebec has invested $98 million in Polycor, a company for which a friend of Pierre Fitzgibbon acted as a lobbyist.
Lion Electric: The government lent $50 million to Lion Electric, whose lead director is Michel Ringuet, then agent of Pierre Fitzgibbon's trust.
Move Protein: Pierre Fitzgibbon held shares in Move Protein , a company chaired by the son of IQ CEO Guy LeBlanc.
Immervision: This company, partly owned by Pierre Fitzgibbon, supplied equipment to a firm associated with the repression of Muslims in China.
A little-known fund for head offices
Half of the $50 million in aid granted by the state to LMPG comes from the Fund for the Growth of Quebec Enterprises (FCEQ), which aims to protect head offices.
The initiative, which notably followed fears related to the sale of SNC-Lavalin, was confirmed in the first budget tabled by the CAQ government in March 2019. It was then a question of a total envelope of $ 1 billion.
The FCEQ was officially constituted in December 2019, but it was not until November 2020 that Quebec paid it an initial sum of $500 million.
The Fund targets companies “that have strong growth potential or that are strategic for the Quebec economy,” reads a government document.
The FCEQ has carried out eight interventions since April 2021, for total investments of $253.3 million.
“The maintenance and development of head offices was no longer on the agenda at all, so I find it good when even that it has not been forgotten,” says Ivan Tchotourian, professor at Laval University.
“But the problem with these special funds is that they have to be well thought out, otherwise they encroach on already existing programs,” he adds.
And contrary to what mentioned at the start, the FCEQ's first investments mainly concerned small or medium-sized companies.
“It is undoubtedly a reflection of the limited means” of the Fund, underlines Louis Hébert, professor of strategy at HEC Montréal.
Olymel: $74 M
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< p>Coveo: $19M
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Katrine Johns has been a reporter on the news desk since 2013. Before that she wrote about young adolescence and family dynamics for Styles and was the legal affairs correspondent for the Metro desk. Before joining The Gal Post, Katrine Johns worked as a staff writer at the Village Voice and a freelancer for Newsday, The Wall Street Journal, GQ and Mirabella. To get in touch, contact me through my email@example.com 1-800-268-7128