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Callidus Capital disputes report of whistleblowers alleging fraud

Canadian alternative lender Callidus Capital Corp. is denying reports that regulators and police are probing the company’s business after whistleblowers came forward to allege the company is engaged in fraud.

The company trades on the Toronto Stock Exchange (TSX) and saw its shares lose more than a fifth of their value on Wednesday after the Wall Street Journal reported that at least four unnamed sources have filed whistleblower complaints with the Ontario Securities Commission (OSC).

Callidus, the lending arm of private equity firm Catalyst Capital Group Inc., loans money to financially distressed firms. Whistleblowers allege artificial inflation of the value of some of its assets and deception of borrowers about the terms of loans.

In a press release, the company said it “knows of no legitimate basis for any whistleblower complaint.”

“Callidus believes that those individuals [who made the complaints], having failed in court, are filing deliberately misleading whistleblower reports with the OSC so that they can then leak them to the press in the hope that the press will publish the allegations.”

Read more at CBC News Business

This article is summarized by Canadian Fraud News Inc.