Canada Province of Ontario East Region In the matter of an Application for a Search Warrant pursuant to section 437, an Assistance Order pursuant to section 487.02; a Production Order pursuant to section 487.012. and a Sealing Order pursuant to section 487.3 of the Criminal Code. INFORMATION ON OATH OF ANICK MARIE MAZEROLLE .19 PROJECT 2013-1304020 Page i 1 . . .1. .. .. .. . Table of Contents INTRODUCTION OF 5 SEARCH WARRANT AT MAGINDUSTRIES LOCATED AT 33 YONGE STREET, SUITE 820. The ?Things to search for" 6 PRODUCTION ORDER FOR TRENT HENRY, AND CHIEF EXECUTIVE OFFICER OF ERNST 8; .. . 7 The documents andfor the data to be 8 OVERVIEW . .. 9 .. .. ..9 Part 2 11 Corruption In the Republic of12 Republic of Congo corruption 12 Company named in this ITO 13 13 Witness named In this 15 Foreign public officials named in this 15 Toronto Magtndustries employees named in this tT017 wm Burton Former Chief Financial Of?cer (CFO) of Maglndustries 17 Geoff Woo Chief Financial Of?cer 17 Rich Morrow - Director of Investor Rotations and Corporate 17 Nardia Smith Human Resource for Maglndustries 1? We Ma Corporate Development Associate for Maglndustries 17 Loondeo Bekah Assistant Controller for Maglndustries 18 Michael Gunns -?'Goneultant for Maglndustries in Toronto 18 Republic of Congo Magindustries employees named in this IT018 Shoubing Ll Finance Director for MagMinerais Potasses Congo SA in the Republic of 18 Fultang Wang - Deputy General Manager for MagMinerals Potasses Congo 18 Jun Tian Head of Project Development for MagMinerals Potasses Congo 18 Jin Development Specialist for MagMInerals Potasses Congo SA 19 Huamlng Zhou Finance Manager for Mangnerale Potasses Congo 19 Kevin Stephens - Risk Manager for Mangnerais Congo SA 19 Fang Huang Chief Executive Of?cer (CEO) of Eucalyptus Fibre 19 Chang Han Yeh Deputy General Manager of Eucalyptus Fibre Congo 19 Yong Cao - Finance Director of Eucalyptus Fibre 20 Ernst 8; Young employee named in this ITO ZONE) Page i 2 . nner 1: PAYMENT TO THE Ashref Zineidln Canadian Partner at EY in 20 . GRAPHS 75TO111W20 Expropriation process in the ROC ~Assessment of the Potash 20 Use of cost code reserved for the port area land expropriation 22 MagMinereis Potasses Congo SA faces issues regarding the land expropriation and seeks the assistance of the Minister 22 ?2 requests 5 million CFA to coordinate alt aspects of the connection 24 Minister of Land Affairs in Pointe Noire to launch the Expropriation Commission for the Mango 25 Request for payment of 6,000,000 CFA to Government 25 Authorization of payment of 0,000,000 28 seeks advice from PricewaterhouseCoopers 28 Discussion regarding the elimination prior of the arrival of the new accounting 29 reports the payment anonymously to 29 meets Michael Gunns in the Republic of 30 Rich Morrow and Geoff Woo travel to the Republic Michael Gunns' termination by Maglndustries 31 Discussion about how to terminate employment contract 32 attends training and meetings in 33 Limited access to 5 work station 33 .. N34 34 55: returns to the Republic of . Kevin Stephens discusses how to organize an amicable situatIOn wit PART 2: EUCALYPTUS FIBRE CONGO THE BLACK MONEY PAYMENTS. PARAGRAPHS 1'12 to 142 35 ivilchaeiGunns' observations after his visit to the Republic of Congo in December 36 Ernst it Young 2012 audit issues of unsupported 36 Loondeo Bekah seeks help from Yong Goa to reconcile 3? Will Burton requests an update regarding the five unsupported 38 Yong Cao describes the five (money) 38 Victor Ketevi mentions black money payments 39 Victor Keievi seeks signature on the Letter of Representation for Eucalyptua Fibre 39 Letter of Representation signed by Feng Huang and Will 39 Resignation of William C. Burton Director of Eucalyptus Fibre Congo Conference call - Review of the audit 41 Michael Gunns? concern with the code of 42 Michael Gunns requests Geoff Woe to review items with Yong Cao. Financial Director of Eucalyptus Fibre Congo 43 Geoff Woo con?rms to Michael Some that they were Eucalyptus Fibre Congo biack money 43 Fibre Congo money report Ag Page I 3 Canada In the matter of an Application for Province of Ontario East Region a Search Warrant pursuant to section 487, an Assistance Order pursuant to. section 487.02, a Production Order pursuant to section 487.012, and a Sealing Order pursuant to section 487.3 of the Criminal Code. INFORMATION ON OATH. l, Anick Marie Mazerolle, a peace of?cer and a member of the Royal Canadian Mounted Police (RCMP) in the Province of Ontario, MAKE AN OATH ?l?D SAY AS INTRODUCTION OF AFFIANT peace of?Cer employed by the RCMP since 2008 and currently assigned to the National Division. Sensitive and international investigations Section in Ottawa, Ontario. i have knowledge of the information in this information to Obtain (ITO) and i believe all of the information In this Fit) to be true. From 2011 to 2013, i gained experience on international corruption and the Corruption of Foreign Public Officials Aci (CFPOA) working on Project an investigation into an allegation of corrupt payments made by executives of the Canadian corporation SNC-Lavalin, which was an offence under the CFPOA. During this investigation, i analyzed the intercepted communications, prepared interview plans, conducted interviews. drafted pans of the court brief, reviewed electronic documents and i was the exhibit custodian. in January 2014. I was assigned to this investigation, called Project i am responsible for obtaining Judicial authorizations for this project. The investigation began after a Canadian citizen, formerly employed by Magindustries. alleged the company made a payment that was contrary to the CFPOA. I have written two ITOs and two search warrants have been issued by the Justice of the Peace in the Province of Ontario. In November 2014, i completed the course titled ?Drafting information to Obtain? taken at the Canadian Police College, in Ottawa, Ontario. The purpose of the course was to develop my knowledge and skills in order to draft information to obtain (ITO) and judicial authorizations. Throughout this where 1 state my belief, this belief is based on my experience as set out above and on other information as stated in this 1T0. To facilitate the reading of this iTO,-i will write my comments in bold inside brackets [comments]. . Page i 5 . .. I SEARCH WARRANT SEARCH WARRANT AT MAGINDUSTRIES LOCATED AT 33 YONGE STREET, SUITE 820, TORONTO, ONTARIO This search warrant Is being sought In relation to the following offences: 7) I have reasonable grounds to believe that offences contrary to an Act of Parliament have been committed: Between January 15?, 2013 and December 31?, 2013, by Longbo Chen, Jin Zhongping, Jun Tlan and Fullang Wang, to wit: i) Bribing a Foreign Public Official contrary to section 3(1) of the Corruption of Foreign Public Of?cials Act; it) Fraud on Maglnduetrtes? Investors contrary to section 380 of the Criminal Code; Conspiracy to commit an indictable offence contrary to section 465 of the Criminal Code. Between January 15?, 2012 and December 313?. 2013, unknown employees of Eucalyptus Fibre Congo and/or Magindustrtes, to wit: i) Briban a Foreign Public Of?cial contrary to section 3(1) of the Cormpfion of Foreign Public Officials Act; Ii) Fraud on Maglndustries' investors contrary to section 380 of the Criminal Code; 8) I also have reasonable grounds to believe that offences pursuant to section 22.2 of the Criminal Code have been committed between January 2012 and December 2013, by Magindusiries; Bribing a Foreign Public Of?cial contrary to section 3(1) of the Corruption of Foreign Public Of?cials Act; Fraud on Maglndustries? investors contrary to section 380 of the Criminal Code. The "Things to search for" 9) Should this search warrant be granted. 1 propose that peace officers be authorized to enter the premises at 33 Yonge Street. Suite 820, Toronto, Ontario. to search for and to seize the following documents and/or data (?Things to search for"): (3) Documents Include all paper formats, electronic data that can be contained within devices (such as but not limited to mobile devices, external storage devices, computers and hard drives) and include agreements. financial?) Page i 6 hair-Hr?ir" my? .. A. statements, notes. letters, spreadsheets, flow charts, correspondence, e- mails and faxes; I) Any documents related to the title or job function of Maginduatrles', andior its subsidiaries', employees for the years 2008 up to and including 2014; It) Any documents for the years 2012 up to and including 2014 related to Magindustries? expropriation projects in the Republic of Congo; Any documents for the years 2012 up to and Including 2014 related to the Iv) Any documents for the years 2013 up to and including 2014 related to the planning and/or any subsequent visit to China organized by Maglndustries by - . . -. and other persons invited; it) Any documents rotated to the payment and/or agreement to pay the vi) Any documents related to ex Magtndustries? employee; vii) Any documents for the year 2013 related to Magindustries' internal control policy, reports, guidelines andior procedures: Any documents related to a 30,000,000 CFA payment made by Eucalyptus Fibre Congo on November 2012, regarding a tax inspection; ix) Any documents related to a 7,000,000 CFA payment made by Eucalyptus Fibre Congo on Juty 2012, regarding a tax Inspection; )0 Any documents related to a 5,000,000 CFA payment made by Eucalyptus Fibre Congo on December 26th, 2012, regarding social secure inspection; xi) Any documents related to a 3,000,000 CFA payment made by Eucalyptus Fibre Congo on July 243?, 2012, regarding commerce administration inspection; in)Any documents related to a 6,000,000 CFA "payment made by Eucalyptus Fibre Congo in 2013 regarding taxable staff benefits. PRODUCTION ORDEB PRODUCTION ORDER FOR TRENT HENRY, CHAIRMAN AND CHIEF EXECUTIVE OFFICER 0F ERNST 8. YOUNG This production order is being sought in relation to the foliowlng offences: 10) i also have reasonable grounds to believe that between January 13?, 2012 and December 315?, 2013, unknown employees of Eucalyptus Fibre Congo and/or Maglndustries have committed the foifowtng offences: a Foreign Public Official contrary to section 3(1) of the Corruption of Foreign Public Of?cials Act; Page i 7 11) (b)Fraud on Magindustries? investors contrary to section 380 of the Criminal Code: i also have reasdnable grounds, pursuant to section 222 of the Criminal Code, to believe that between January 2012, and December 31?, 2013, Maglndustries have committed the following offences: Bribing a Foreign Public Official contrary to section 3(1) of the Corruption of Foreign Public Officials act; (b)Fraud on Magindustrles? investors contrary to section 380 of the Criminal Code. The documents similar the data to be produced ?12) 13) i propose that Trent Henry. Chairman and Chief Executive Officer of Ernst 8; Young Canada or his designate shell produce documents andlor data, or copies of them certi?ed by af?davit to be true copies, located at 222 Bay Street. PD. Box 251, Toronto, Ontario or any other location. off site facility, receptacle or place where Ernst a Young maintains and stores the things referred to as documents andlor data to be produced to Constable Anick Marie Mazeroiie, or her designate, a peace officer of the RCMP, Sensitive and internationai investigations Section at 155 McArthur Avenue, Room 523, Ottawa, Ontario as soon as reasonably possible but in any event no later than 30 days from the date this order Is served. Should this production order be granted, there are reasonable grounds to believe that the following documents andlor data will afford evidence in respect to the commission of named offences. Documents include all paper formats, electronic data that can be contained within devices (such as but not limited to mobile devices. external storage devices, computers and hard drives) and include agreements. ?nancial statements, notes, letters, spreadsheets, flow charts, correspondence, e-mails and taxes; (at) The documents andlor data. or copies of them certified "by affidavit to be true copies to be produced are: i) The 2012 Magindustries audit file, including the paper and electronic file. auditor?s notes and emails; ii) Arty documents related to a 30,000,000 CFA payment made by Eucalyptus Fibre Congo on November 2012, regarding a tax inspection; ill) Any documents rotated to a 7,000,000 CFA payment made by Eucalyptus Fibre Congo on July 2012, regarding a tax inspection: iv) Any documents related to a 5,000,000 CFA payment made by Fibre Congo on December 26th, 2012, regarding social secure inspection; v) Any documents related to a 3,000,000 CFA payment made by Eucalyptus Fibre Congo on July 2012, regarding commerce administration inspection; vi) Any documents related to 3 6,000,000 CFA payment made by Eucaiyptus Fibre Congo in 2013 regarding taxable staff benefit. Page I 8 4m.? 14} 15) Part 1 16) 18) The following section is my understanding of the state of the investigation. Its sole purpose is to heip the reader Understand the grounds contained in this Since, there are two separate offences currently being investigated, i have divided the overview in two sections titled ?Part 1" and "Part Patt1 describes events surrounding-a payment allegedly made to the if of the Republic of Congo. Part 2 describes five "black money? payments allegedly made by Eucatyptus Fibre Congo in relation to taxes that the company owed the Congolese government. The grounds that support my beiief will follow the overview. This contains several mentions of amounts in CFA Franc. the least currency used in the ROC. To provide the reader with a better understanding of the value, 1 accessed the Bank of Canada website at in order to get the conversion from (CFA Franc)? to (Canadian Dollar)". teamed that on May 2nd. 2013. the Bank of Canada showed that one Canadian Dollar was worth 498.0080 XAF. For Part 1, in this i will put in bracket the value in reference to May 2013. i also iearned that on December 31?. 2012, one Canadian Dollar was worth 500.0000 XAF. For Part 2, in this i will put in bracket the value in reference to December 2012. believe that the terms "Fora", Franc? and are the same currency and that when it is indicated it means millions CFA. i came abrose these terms from reviewing e-mails and documents, which signi?es the same currency.] accessed the "Investopadia? website at and I learned that the acronym in French stands for ?Communaute Financiere d?Afrique" (African Financial Community?. Project began in October 2013 after a Canadian citizen working as i for Maglndustries in the Republic of Congo (ROG), sent an e-maii to the Trade Commissioner at the Canadian Embassy in Kinshasa, Democratic Republic of Congo (DROC). reporting a payment made by the company that vioiated Canadian law. The Department of Foreign Affairs and Trade Development then reported the allegation to the RCMP. There are two countries in Africa which are named Congo. One is known as the ?Republic of Congo? (R00). and the second country. which is adjacent to it. is known as the ?Democratic Republic of Congo? (DROC). Magindustries, a publiciy traded Canadian company on the Toronto Stock Exchange (TSX), was established in 1997 to evaluate key mineral licenses in the ROC. Its corporate head of?ce ls tocated In Toronto. Ontario. worked for MagMinerals Potasses Congo SA. a subsidiary of Magtndustries in the ROC from January of 2012 to September of 2013. He met with RCMP investigators and provided a video statement regarding two cash payments madeon May 2013, of 5.000.000 XAF [$10,040 to)? Page I 9 . .. . .. . ?una- .t -. .t awmmwpayment of 1,000,000 XAF [8 I elegaio I ought the payments were illegal and provided copies of ?nanciat documents related to the payments to investigators. He believed the payments were made in relation to an eXproprlation project sought by Maglndustnes. I believe that an expropriation Is an authorization to take private land for public use by the government without the consent of the owners. MagMinerais Potassee Congo SA was facing a big issue concerning the operations of the expropriation project and to complete the process of the expropriation of 290 hectares of land in the new port area. On July 2013. Magindustrtes. reporting the illegal payment made to the 2013. sent an anonymous e-maii complaint to. in August 2013, Geoff Woo, Financial Controller for Magindustries in Toronto. and Michael Gunns. a Consultant for Maglndustries, traveled to the R00 and both met with - reported to Michael Gunns that he refused to authorize the aforementioned payment, As a result of _s refusal, Shoublng Li. Jin (King) Zhongping, Jun Tlan and Fuilang Wang authorized the payment made In cash. Maglndustries in the Toronto office was aware of the payment. In September 2013, Geoff Woo offered ?a position in Toronto at a lower salary, and felt it was a demotion. Later, - received a revised offer explaining that his position had been eliminated due to a reorganization. refused the revised offer and in November 2013, he signed a release to end his empioyment'with Maglndustries. in September 2013. MagMinerals Potasses Congo SA Was worried about the relationship between Michael Gunns and -. if they act together? Was likely to provide Gunns with information considered problematic during his work in Points Noire. R00 that could damage the company. in March 2014, a search warrant was executed at the business premises of Radiant Communications, a third party e-rnail provider for Maglndustrles and ali e-mails andior electronic communication between December 2012 and December 15?, 2013, belonging to Magindustries or its employees were seized from the business of Radiant Communications. Information seized at Radiant Communications demonstrated that in 2013. Maglndustrles faced issues regarding the expropriation project it was seeking. Magindustries officials (Jun Tian. Fuliang Wang and Longbo Chen) then invited if! to visit their project. Days before the visit, the requested a payment of 5,000,000 CFA [$10,040 to coordinate obtaining the support from the Premier and the Mayor of Pointe Nolre and Kouilou required for the expropriation. This is the request for payment that refused to authorize which was ultimately approved by Fuliang Wang, Deputy General Manager for MagMinerals Potasses Congo SA, Jun Tian, Head of Project Development for MagMinerais Potasses Congo SA and Jin Zhongping, Development Specialist for MagMinerals Potasses Congo SA. As will be detailed in this ITO below Lon bo Chen Fuiiang Wang and Jun Tlan aiso invited to visit China with his wife and his entourage during the same period of time that Maglndustrles was Page i 10 26) Part 2 27) 23] 29) 30) 31) experiencing dif?culties with their expropriation project. it will be explained that although the invitation was signed by Longbo Chen, and delivered by Jun Tian, Chen requested that it be made using a different company?s letterhead. have reasonable grounds to believe that employees of Magindustrles, Jun Tlan. Fuliang Wang and Jin agreed and then paid a bribe to a Foreign Public Government Official in order to gain approval for the expropriation of land the company wanted. thus gaining an illegal business advantage. The investigation has revealed that Eucalyptus Fibre Congo, a subsidiary of Maglndustries In the ROC was involved in the payments of bribes. These are referred to as "black money" and ?under the table" payments by Eucalyptus Fibre Congo, Maglndustrles and the auditing firm, Ernst Young (EY). These payments Were made in order to lower taxes owed by the company to the Congolese government. The payments allowed for Eucalyptus Fibre Congo to avoid paying fines imposed by the tax authorities thus resulting in a substantial ?nancial benefit of the said company. A spreadsheet, seized as part of the investigation, as well as e-mails, showed that Eucalyptus Fibre Congo employees, Maglndustries management in the R00 and Toronto were made aware of the payments during the audit conducted by the firm EY. These payments caused concern for Maglndustries? management. who then decided to investigate further. As tax authority ultimately rests with government, i believe that although the persons who received the money are not known at this point, it can only be Congolese Public Officials who had the appropriate authority to settle these lines. Evidence showed that Eucalyptus Fibre Congo had developed a sophisticated structure Wl'lere two sets of books (accounting) were used. and a third party company was established to pay the bribes. it was also suggested that only Chinese employees should be employed in Euloalypius Fibre Congo's Human Resources and Finance department. These steps were taken in order to shield . Eucalyptus Fibre Congo from criminal liability and demonstrate the extent to _whioh the company engaged in illegal practices in order to gain an unfair business advantage and defraud the R00 by not paying the full taxes owed. This practice also put Maglndustries' shareholders at risk as these practices are illegal and could, it discovered, affect Maglndustrles? share price on the Toronto Stock Exchange. in total, five payments were made to unknown persons for a total of 45,000,000 CFA [$90,360 Eucalyptus Fibre Congo benefitted from these payments by not having to pay $716,935 CAD. I am seeking a search warrant to search the business premises of Maglndustries in Toronto because i believe that the documents andior data (?Things to search afford evidence of the offences under investigation. I am also seeking a production order to be served upon Ernst 8? Young because i believe that the ?Things to be produced" will afford evidence of the offences under investigation. Page I 11 . - . .. 32) During the analysis of the data seized at Radiant Communications. Investigators came across some potentially solicitor-client privileged data irom several lawyers. The course of action taken was that the potentially privileged documents were no longer accessed and were excluded from future searches. Alt documents, In which these people were a party. were rendered lnaccessibie to inVestigatore. [Unless otherwise stated,.when 1 refer to e-maiis attachments as react an e-meti" or "t read an attachment?, I acquired the knowledge from reading e-maiis andlor the attachments seized at Radiant Communications and subsequently flagged as pertinent by investigators who were conducting the review of the seized electronic date] [As will be pointed out in the grounds to believe, certain documents were translated from Chinese to English by Barbee Sit and Dean Yung, both certi?ed RCMP translators. Due to the differences between English and Chinese, it sometimes seems that certain words are missing but I did not alter theses sentences for fear of being misleading] GROUNDS FOR BELIEF Corru tlonin bl f0 :1 33) I accessed the website from the United States Embassy in the ROC at and I read the country report titled "2012 Investment Climate Statement? which pertains to the R00. From the report. i learned that: (a)The R00 is ideated in Central Africa. The popuiation is estimated at 3.9 million and most of the inhabitants ?ve in the three main cities of Brazzaville (Capital), Points Metro and Doiisie. It is adjacent to the DROC. (b)The ROC's investment climate is constrained by bribery. Corruption is regularly linked to the conduct of business In the country. For instance. contract terms are not clear and bribes are frequently requested even though the Congolese law forbids them. The R00 is improving by putting in piece mechanisms to address the chalienges of corruption. However, the country stili experiences major corruption and transparency Issues. The timber industry is also experiencing similar corruption challenges as the mining sector. Rggubilg 9f ango corrugtign law 34) i read Congolese iaw n05-2009 dated September 2009, on corruption and published on October 2009. in the Officiai Journal of the Republic of Congo. The document is written in French and titted OFFICIEL - DE LA REPUBLIQUE DU CONGO - paraissant Ie Jeudi do cheque semalne a Brazzaville?. The iaw in the ROC regarding corruption states the foiiowing: (a)Seotion 2 defines corruption. Acts of corruption are commissions undue given or received by persons with public or private functions as welt as the actions of those abmre when they meant or breach of duties arising out of Page i 12 ii? their status as official commissions, private employee, independent agent, or obtaining illegal bene?ts of any nature for themselves or others; Section 3 defines the punishment. It is punishable by imprisonment of two to ten years and a ?ne equivalent to twice the value of premises endorsed or things received or requested. with a minimum of 1,000,000 CFA: Ali persons invested with an elected mandate. administrative or Judicial. public otticiai, military, agent or employee under the contrci of public authority administration, or citizen charged with a mission public service, solicit or accept offers or promises, solicit or receive gifts, to do or refrain from doing any act of his duties or employment. om a Maglndustries 35) i accessed the Industry Canada website at and I learned that Maglndustries Corp. and MagMinerals Potash Corp. are incorporated in Canada. 36) accessed the Maglnduetries website at ww.meglndustries.com and i learned that: Magindustries was established in 199? to evaluate key mineral licenses acquired in the ROG. During the following years they solidified their presence in the region and created a base of assets. operations and people that would heip them to capitalize on the potential of their licenses to build value for their shareholders. Maglndustnes has three business units: MagForesiry which owns and operates Eucalyptus Fibre Congo (EFC), a business based in Points Noire. ROG. (Ii) MagMinerals which is developing the Mango Potash project in the Republic of Congo, and the subsidiary MagPotasses du Congo (MP0), 3 business based in Points Noire, [i believe that "MagPotasses du Congo" (MP0) is the same as ?MagMinersls Potasses Congo as both names are listed on the Maglndustrles website]. (ill) Potesse du Congo, 3 potash exploration division, based in the R00. (0) Magindustnes Corporate head of?ce is iocated at 33 Yonge Street, Suite 820. Toronto, Ontario, Canada. They haVe three regionai offices: Eucalyptus Fibre Congo located at Benoit Loembet Avenue. BP 430, Points Nolre, (ii) MagMinereis Potasses Congo SA sitUated in the Atlantic Palace building at Charles de Gaulie Avenue, BP 1128, Points Noire, (Ill) Magindustrlas Services inc located at 46 Dayreiis Road, Christ Church BB 14030. Barbados. West indies. AR Page i 13 Maglndustrles describes itself as being committed to high standards including accountability and responsibility. Corporate responsibilities mentioned are human rights, bribery and corruption as well as providing financial disclosure. Magindustries is publically traded and listed on the Toronto Stock Exchange under the trading symbol As of October 15?. 2014, the share value was listed at $0.19 CAD. Evergreen Resources Holding Ltd, a Chinese company and subsidiary of the Evergreen industries Groupt owns approximately 86.4% of Magindustrles? common shares. (9) The Board of Directors consists of the following: (Simon) Liang: Chairman: (ii) Gerry Wang: Lead Director; Yuan Ding: Director; accessed the Magindustries website at and I learned that Yuan Ding is a member of the Board of Directors and the Chair of the Audit Committee for Maglndustrles. Yuan Ding received a in Accounting from the institute of Enterprises Administration at the University Montesquieu Bordeaux In France] believe that Yuan Ding is also referred to as Dr. Ding, because of his (iv)Longbo Chen: Director; Qiang Jiang: Director; (vi)Weiguo (William) He: Director; [i believe that Weiguo (William) He is a lawyer for Davis LLP Law Firm based in Vancouver, British Columbia. On April 2014, after learning that weiguo William He had a Maglndustrles email address of whe@magindustries.com, all items with the word ?who? were tagged privileged from the documents seized at Radiant Communications and were no longer accessed by investigators.] (vii) Zhang: Director: MagForestry owns Eucalyptus Fibre Congo, which is based in Points Nolre in the R00. The Eucalyptus Fibre Congo plantation supplies 500,000 tonnes per year of wood chip plants built by Eucalyptus Fibre Congo on its concession lands located within the port of Points Noire; MagMinerai Potasses Congo SA (MPO), which is a Magindustries? subsidiary, signed a Potash investment Agreement with the government of the ROC for the development of the Mango Project. The potash deposit is presently under development and the goal for the factory is to produce 1.2 million tonnes of potash per year". Page i 14 ?itness named in this no 37) as) i listened to the audio and video recordings of the witness statement of taken on December 2??,201 3. and December 2013, by Sergeant Denis Beaudoin and Staff Sergeant Martin Bedard, both members of the RCMP in Ottawa. The interview took place at the Canadian Embassy in Kinshasa, DROC. To facilitate the reading of this 1T0. I wlil refer to the interview as "in his statement When 1 refer to ?in his statement, i acquired the knowledge included in the paragraph from listening to the audio and video of his statement. in his statement, expiained that: (a)He is a Canadian cltizen. a Certi?ed Management Accountant and a Chartered-Public Accountant. He completed a Bachelor in Accounting Sciences and a Bachelor in Business Administration, Specialization in Finance; He previouer worked for Deloltte and Touche inc as an auditor; in December 2011, he was hired as 3- for Magindustrtes by Wiil Burton, Former Chief Financiai Officer (CFO) and Longbo Chen, Chief Executive Officer (CEO). - arrived in the R00 in January 2012. At Magindustries, six people reported to and he was the second person in charge of the Department of Finance in the R00 for Maglndustrles. Foreign public of?cials named in this ITO Page i 15 Page I 16 Ioronto Maplndustries named in this Will Burton - Fcrmer Chief Financial Of?cer (CFO) of Magindustrles 49) accessed the Linkedln website at and 1323de that Will Burton is the Former Vice-President and CFO of Magindustries. He worked at Maglndustries from April 2006 to March 2013. Geoff Woo Chief Financial Of?cer 50) i read an attachment to an e?maii sent on December 2013, which is an employee list, and i learned that Geoff Woo was a Financiai Controller for Maginduetries. believe that Geoff Woo was a Financial Controller for Maglndustries in Toronto prior to his promotion in February 2014.] 51) read a report titled ?Magindustries Annual Information Form? for the year ending December 31?, 2013, and i learned that on February 2014, Geoff Woo was appointed Chief Financial Officer of the company. Rich Morrow - Director of investor Relations and Corporate Development 52) i read an e-rnaii sent on June 2013, by Rich Morrow and i teamed that he is the Director of investor Relations and Corporate Development for Magindustries in Toronto. Nardle Smith a Human Resource for Maglndustrles 53) I read an e-maii sent on November 2013. by Nardia Smith and teamed that she is a Human Resources Specialist for Magindustries in Toronto. Yue Ma Corporate Development Associate for Maglndustries 54) accessed the Linkedln website at and i teamed that Yes Me has been in the position of Corporate Development Associate with Magindustriee in Toronto since May 2013. Page i 17 Loondso Bskah - Assistant Controller for Maglndustrles 55) i read an attachment to an e-mail sent on December 2013. which is an employee list, and i learned that Loondeo Bekeh is an Assistant Controller at Maglndustdes In Toronto. Michael Gunns Consultant for Magtndustries In Toronto 56) in his statement, stated that Michael Gunne was an internal Control Expert. a Consultant for Maglnduetries and a Certi?ed Chartered Accountant in Toronto. 57) I read a document attached to an e-mall sent on October 2013. which described the work history of Michael Gunns, FCPA, FCA and i learned that he is a Former Chair of the Risk Management and Governance Board of the Canadian Institute of Chartered Accountants. He was a fellow of the Ontario Institute of Chartered Accountants and a graduate of Harvard Business Schools Advanced Management Program. He was contracted by Maglndustries as a Corporate Governance Specialist. viewed the Chartered Professional Accountants Ontario (CPA) website at and I learned that the designation is the highest designation awarded by CPA for outstanding career achievements as well as outstanding service to the community and the profession] 91 Congo Maglndustrles employees named in this Shoublng Li - Finance Director for MagMinerals Potasses Congo SA In the Republic of Congo 58) i read an attachment to an e-matl sent on December 2013, which is an employee list. and i learned that Shoublng Ll is as Finance Director for MangneraIs Potasses Congo SA and was hired on April 2013. Shoublng Li's Manager is Longbo Chen. Fullang Wang Deputy General Manager for Mangnerals Potasses Congo SA 59) i read an attachment to an e-mail sent on December 2013, which is an employee list, and I teamed that Fuilang Wang is a Deputy General Manager for MagMinerals Potaeses Congo SA. Futiang?Wang's Manager is Longbo Chen. Jun tan - Head of Project Development for Mangneraie Potasses Congo SA 60) From reviewing the statement of i teamed that Jun Tian is the Head of Project Development for Mangnerais Potasses Congo SA. Page 18 nun-?nae. . - Development Specialist for MagMinerals Pctasses Congo SA 61) i read an attachment to an e-meil sent on December 2013. is an employee list, and I learned that is a Development Specialist for MagMine'rals Pctassee Congo SA. 82) From reviewing the statement of i learned that Jun Tian is Jin (King) supervisor. Huamlng Zhou - Finance Manager for Mangnerals Potasses Congo SA 63) read an attachment to an e-mail sent on January 2013, titled representation draft.dcsx?_ and I learned that Huamlng Zheu la a Finance Manager for Mangnerals Potasses Congo SA. Kevin Stephens - Manager for Mangnerale Potasees Congo SA 64) read an email sent on March 2013. from Kevin Stephens and teamed that he is a Risk Manager for Mangnerals Potaeses Congo SA. Alchun Deng Adviser to the General Manager for Mathnerals Potasses Congo SA 65) read an attachment to an e-mall sent on December 2013. which is an employee list! and I learned that Alchun Deng is an Adviser to the General Manager for MagMinerais Pctasses Congo SA and was hired on March 2013. Alchun Dong?s Manager is Longbo Chan. 66) I read an email sent on August 2013, from Alchun Dong and learned that she addressed herself as Alice Deng. Feng Huang -- Chief Executive Officer (CEO) of Eucalyptus Fibre Congo i read an attachment titted Letter of Representatlcn and I learned that Fang Huang is the CEO of Eucalyptus Fibre Congo in the ROC. Chang Han Yeh Deputy General Manager of Eucalyptus Fibre Congo 68) read an attachment to an e-mall sent on December 2013. which Is an employee list. and i learned that Chang Han Yeh Is a Deputy General Manager of Eucalyptus Fibre Congo in the R00 and was hired on July 2012. Chang Han Yeh's Manager is Fang Huang. Page i 19 . . w. .. 69) I read an e-mait dated December 2012. from Chang Han Yeh to Michael Gunns and i learned that the individual addressed himself as "Hank Yeh". 70) i read an e?mail dated December 2012. from Michael Gunns to Chang Han Yeh and i learned that Michael Gunns addressed him as "Hank". [i believe that Chang Han Yeh Is also referred to as Hank] Yong Cao Finance Director of Eucalyptus Fibre Congo 71) I read an attachment to an e-mall sent on December 24th, 2013, which is an employee list, and i learned that Yong Geo is a Finance Director of Eucalyptus Fibre Congo in the R00 and was hired on February 2012. Yong Cao?s Manager is Feng Huang. 3'2) i read an e~mait dated May 2013, from Michael Gunns to Rich Morrow and i {earned that he referred to Yong Cao as "Cao Yong {i believe that Yong Cao Is also referred to as Can Yong (Carin Ernst Young employee named in this ITO Aehraf Zineldin Canadian Partner at EY in Toronto 73) accessed the Linkedln website at and i learned that Ashrai Zlneidln is a Partner in Assurance Services at EY in Toronto since January 2007. 74) i read an e?mail dated March 2013, from Ashref Zlneldin to Michael Gunns and I learned that his work address is listed as EY Tower, 222 Bay Street, P.0. Box 251, Toronto, Ontario. Expropriation process In the ROC Assessment of the Koullou Botash Proleot 75) I read a section of an environmental and social impact assessment on the Magindustnes website pertaining to expropriation for the Potash Project for the R00 (Volume i) released in February 2010. The assessment was prepared for Magindustries by Genivar, with support from Environment Plus and reviewed by SNC Lavaiin. A section of the document describes the expropriation process for ?reasons of pubiic interest" in the ROC. This expropriation process has four phases: The preliminary enquiry/:3? Page I 20 - The preliminary enquiry is an administrative procedure whose goal is to inform and consult the members of the public about a project which is likely to lead to an expropriation. The expropriation process is launched as soon as the expropriator sends a ?le to the Minister of Landownership Reform and the Preservation of the Public Domain. Regarding the file, the Minister nominates a commission of enquiry and stipulates the objectives, the opening date as well as the duration. it necessary, a meeting can also be held with members of the public for them to voice their concerns. An enquiry report Is sent to the Minister for Landownership Reform and the Preservation of the Public Domain, the Minister responsible for land administration, as welt as the Minister responsible for the project after reviewing the comments of the persons concerned by the expropriation. At that moment, these ministers evaluate whether or not to carry out the expropriation project on the location targeted; The public utility declaration: I) The public utility declaration includes the act by which the Government declares that pursuing an operation implicates a general interest. which is adequate to justify the expropriation process. in order for the expropriation to be carried out, public utility has to be affirmed by a ministerial order or by a verdict which limits its period of validity. the nature of the work, the area implicated and the timescale; The plot enquiry: i) The plot enquiry allows the administration, after hearing all parties. to determine which plots are to be expropriated, to search for the owners of property and others concerned: The dead of transferabllity and demand for full expropriation: i) The ministerial order of transferability is the act by which the appropriate authority draws up the list of plots to be expropriated. Those having their property expropriated are noti?ed and the act is also released in the Official Journal. The transfer of ownership can be supported either by the expropriation judge?s decision or through mutual agreement. initial complaint 76) I read an e-mail sent by if to Sergeant Denis Beaudoin and i learned that: On September 24?: 2013, saying he wanted to meet a Trade Com violating Canadian and Congolese iaw. being ?squeezed out? of his company for bringing it up to the Compaan . Management. sent an email to his company Was Page i 21 -v'accessed the following website of the Canadian Embassy of the Republic of Congo at Contactezaspx. beiieve that the acronym is an e-maii address belonging to the Canadian Embassy in Kinshasa, i read an small and two attachments sent on March?27m, 2013, from Kevin Stephens, Risk Manager MagMinerais Potasses Congo SA, to Yue Ma,? Corporate Development Associate regarding a service note from the Ministry of Land Affairs. I learned that Magindustries received a service note dated March 2013, signed by Pierre Mabiala, Minister. explaining that an expropriation commission had been put in place under his guidance. The President of the Commission was Francis Vethey Bemba, Adviser to the Minister of Land Affairs. i read an e-maii dated March 2013, from Huaming Zhou. Finance Manager for Mangnerais Potasses Congo SA where he advised that sit expenses in relation to entertainment of the commission, inoiuding ?ight tickets, hotel accommodations, and per diems will be under the cost code of 050007. Mangnerels Potasses Conno SA feces issugs regarding the land and seeks the assistance of the Minister 79) 80) Paragraphs 80 and 81, describe e-maiis sent on April 103?, 2013 and April it?. 2013. They have been translated from Chinese to English by a certified RCMP transistor. i read an e-mail. sent on April 2013. from Jun Tian, Head of Project Development for MagMinerais Potasses Congo SA, to Fuilang Wang, Deputy General Manager for MagMinerais Potasses Congo SA, copied to Chen Longbo, CEO of Maglndustries and Yes Ma, Corporate Development Associate for Maglndustries in Toronto. i teamed that Jun Tian wrote that: MagMinerais Potasses Congo SA was facing a big issue concerning the land expropriation. particulariyin the new port area concerning 290 hectares of land. On April the Homeland Minister committed that he would start to cooperate with MagMinerals Poiasses Congo SA and begin work with related iand expropriation: (blLast week. Francis, (Minister?s Consultant) and key members of Land Expropriation Department from the province of were summoned by the Homeland Minister and the Mining Minister to deal with another company?s land expropriation issue: On April 81", Francis returned to Points Noire to supposedly initiate the MagMinerals Potasses Congo work, but on April he was told by the Homeland Minister to go to Brazzaviile. The land expropriation task has still not hemmy Page I 22 .. we?. .?wwu.(Juan Tian) would go to Brazzaville tomorrow to focus and negotiate with Francis. A letter was drafted (in French edition in French and Chinese edition) with Manager Chen's name in order to give more pressure to Homeland Department and to urge the Homeland Minister to interfere. believe that the dates tnciuded In this paragraph are in 2013.] Following the previous email, five other e-maits were exchanged between Jun Tlan and Longbo Chen which were copied to Fullang Wang and Yua Me. i read these five sails and leared that Chen inuired about th gee the . Jon Tian replied asking Chen if the invitation ietter had to be under Meg?s CEO's name to which Chen replied that there was an issue with Meg's invitation and he suggested using Evergreen?e name instead. On April 2013. Jun Tlan wrote that if the letter could be signed, he would meet_ to diacuss the land expropriation matters and the visit to China. Longbo Chen tater stated that he could sign the ietter tomorrow and that could bring two to three people for his visit to China and it could last for ?ve to seven days. To avoid dealing with the Ministry of Foreign Affairs, Chan wrote that he should be represented as a private citizen, Chen then wrote that ?to pressure the con?rmed schedule cannot be casual, trust is importanl?and that he (Chen) can bear two or three days delay for the actual work, but he made it clear that they ?absolutely cannot be sieclri?. i read two attachments in French sent on April 2013. at 09:52 hours from Xingxing Xu to Jun Tlanl copied to Chen Longbo, Fuliang Wang and Yue Me. I teamed that the attachments consisted of the following: ta)A letter dated April 2013, signed by Longbo Chen and written on Mangnerats Congo's letterhead. it was addressed to the- i soliciting an intervention for the expropriation project. The ietter explains that they had a fruitful meeting in Brazzaville and the commitment from was to provide special assistance regarding the operations of the expropriation project and to complete the process of expropriation of 290 hectares in the region of the new port before April 2013. MagMinerals Potasses Congo SA was encountering difficulties with the avallabliitv of the employees under his guardianship and is soliciting his assistance. A ietter dated April 2013, signed by Longbo Chen and written on rgen Holding Grou? letterhead addressed to tit Page i 23 .. . - . .. . 33) I read an e-mstt sent on April 2013, from Jun Tlan to Xu, copied to Chen Longbo and Futtang Wang. The e-mail was translated from Chtnese to English by a certi?ed RCMP translator. i teamed that Jun Tian submitted It (the letters) yesterday and he stitl has not seen the Jun Tlan wrote that he is ?making necessary communication Iinks with the Amfnistratton Director?. 84) read an e-mali sent on April 2013, by Jun Tian, Head of Project Development for Mangnerale Potasses Congo SA to Fultang Wang. Deputy General Manager for Mangnerats Potasses Congo SA reporting on work In Brazzavllte. The e-mail was transtated from Chinese to English by a certified RCMP transistor. I learned that Jun Tlan Wrote that: The I hoped that his wife coutd accompany him for his trip to Chlna. It stated that Jun Tlan advised Manager Chen and obtained approval. confirmed that his trip to China would be from July 1? to and he requested an itinerary and visit: believe that the 5 million FA requested in this e-mall Is the cash payment that refused to authorize and reported the Canadian authorltlea, based on the tlmeframe and the amount.) Page i 24 . w. .Av-i-Q Hv-wt-A .. win-a ?u?uhw?-H?Q-v \Lu. .. . . He needed the Financial Department to prepare the cash since May 1?t was a holiday. He would go to the Homeland Department to get a list of members. expenses and itinerary as soon as possible to pass on to Ministry of Finance and General Affairs Department; The implementation of the Land Expropriation Committee ceremony contains - three parts as follows: 1) Welcome speech by Magl?vlinerals Potasses Congo Ii) Project preview by Mangnerals Potasses Congo believe that the dates included in this paragraph are In 2013.] Re ue tf entof6 00 000 Govern ntOf?cials 86) In his statement, explained that on May 2013, he saw two ?nancial forms for approval on his desk related to the cash payment. Sergeant Denis had previously Beaudoin presented copies of these forms that sent. - described these two forms as: DMVANCE sun - (APPENDIX Expense Request Form t) explained that the purpose of this form was to have expenses approved; it) The payment was requested by (King) Zhongping who was in charge of Project Development. The reason for the payment was expenses for the The accounting code 050007 was on the form which described as being used for per dlem payments. The amount of the payment was 6.000.000 CFA [$12,043 He believed that the requester?s signature was King Zhongping and the form was dated May 2013. believed that the payment was approved and signed by Jun Tian. Head of Project Development, who is also King Zhongping's boss: iv) Fuiiang Wang, the Deputy General Manager signed the form?? Page i 25 w?mw .-.. .I. .. A lunmn-QL-I?v bum-o .. ?Hm-o a? wag.? i) He explained that the purpose of this form is to provide the Justification and the details of the expense: ii) He mentioned that the year on the receipt shoutd be 2013 instead of 2012. explained that the receipt was possibly made by the Cashier using an older form: He described ?Souveratnet?? (sovereignty) as a government term and ?Frais de Mission Forfeit" (Delegation expense) as expenses for someone who could be vvith the iv) vi) He believed that the two signatures on the bottom of the form are Fuliang I Wang, the Deputy General Manager and Jun Tian. Head of Project Development; vii) his form is in relation to the launching of the expropriation commission for the Mango Project. Mango is a village North of Points Noire in the ROC where the Project is located. - further stated that: He did not sign to authorize the payment totaling 6,000,000 CFA [$12,048 He spoke to Shoubing Li, Finance Director for MagMinerals Potasses Congo SA, regarding the possible illegal payment according to Canadian legislation. Shoubing Li told that he worked elsewhere in Africa and that it was the way to conduct business in Africa. believe that Shoublng Li expressed that payments to Foreign Public Of?cials are necessary to conduct business in Africa in order to develop the project] From the discussion with Shoubing Li. understood that the payment was going to be made. Shoubing Li con?rmed that he would assume the responsibility for the approval for that speci?c payment and any future payments request If necessary; it was a significant payment. MaMinerals Potasses Congo SA kept approximately 10,000,000 CFA [$20080 in cash in the office. so it would have required a cash replenishment. 4Q Page 26 he?. . .- .. v?d-kuH-?w?v w-n-AA-aaluwmw? believe that the payment was in fact made because I read an e-maii sent on May 2013, indicating that the cashier, needed to do a cash replenishment} 88) i read an e-mail and an attachment sent on October 2013. from Bekah, Assistant Controller at Maglndustries in Toronto and i learned the following: A document signed by Longbo Chen (CEO of Magindustries?) and Geoff Woo (CFO of Magindustries) stated that one of the milestones achieved was that the Minister of Land Affairs of the Republic of Congo put in place a Land Expropriation Commission and mandated the Commission to ?nish expropriation as fast as possible on the 290 hectares of land occupied by the as) i read an e-matl and an attachment sent on May to": 2013, from Jun Tian, Head of Project Development for MagMinerals Potasses Congo SA. to Elisabeth Bouanga. Chief of Community Services for MagMinerais Potasses Congo SA, and i learned that MagMinerals Pctasses Congo SA obtained authorlt to occup 290 hectares of land in port zone in Pcinte Noire. Page i 27 ha.- uu-t-nAuthorization of garment 9f 6,000,000 QEA ac) 91) in his statement, explained that later In May 2013, he saw a form titled DE SORTIEIENTREE DE - dated May 2013, (APPENDIX C). consulted and initialed a copy ot'this form which he had previously sent by e-mail to Sergeant Denis Beaudoin. He described this form as being used to obtain money from the cashier, Fania Tchissambou. also indicated that: The reueste nd e?ciary is ing Zongping. was 421140 which is used in the accounting in the general ledger. The standard project code PDD-PLA 050007 is related to per diem payments; On the form, identi?ed three signatures: l) The signature under ?Visa Calsse" was Fania ii) The signature under ?Visa Bene?claire" was King The signature under "Visa was Shoubing Li. (0) First, -- -- . was unsure about the Beneficiary Visa signature on the form as it is uncommon to have the same person who is the requester and the beneficiary. After comparing signatures with APPENDIX A and APPENDIX C, - believed that the Beneficiary Visa signature was King reviewed APPENDICES A and and Jin (King) signature In APPENDIX A did not appear to be identlcal to the Bene?ciary Visa signature In - seeks advice from PricewW In his statement, - .5 explained that: Following the request for payment dated May 2013. he sought advice from PricewatemouseCoopers (PWC). Financlat Advisers for Magindustrles: He met with Moise Koitolo from PricewaterhouseCoopers on May 243?, 2013 to discuss the payments allowed with respect to the local and Canadian legislation to GOVemment Officials. Moles Kokoto shared that according to Congolese regulations, payments for per diems to members of a Congolese Government Officials cannot exceed 150,000 CPA {$301.20 Also, Moles Kokolo provided a copy of the "Congolese Law no. 94-8? to titled ?Decrei? no 94?8 do 27 jenvier 1994 ?xant (e regime des indamnli?es do deplacemeni dos agents do l?Etat?. AR Page i 28 what-Wm- .. - Qigcussion regarding the elimination [l accessed the PricewaterhouseCoopers website at and saw Moles Kokolo, listed under the Pricewaterhousecoopers adviser "contacts" tab with his phone number and e-mall address. (in April 2014, during the analysis of seized electronic data, I became aware that Molse KoI-tolo is a lawyer for PricewaterhoueeCoopers in the ROC. Sin the infmiatlon included in this paragraph was provided by i believe that the solicitor-client privilege no longer applies.] sent a copy of the law he was provided by Mates Kokoio to Sergeant Denis Beaudoln which i read. I learned that the document is regarding the indemnities of travel expenses for Congolese Government Officials. The document outlines categories of Government Of?cials and the maximum aliowed to be paid. The limit for a Minister is 150,000 CFA [$301.20 After his meeting with Moiee Kokolo, he told his supervisor. Shoublng Ll, that he was refusing to sign any per diem payments above 150,000 CPA [$301.20 to Government Officials. - stated that Shoubing Ll told him that he (Shoublng Ll) would authorize future payments if over the limit. prior or thegnwai orthe new accounting supervisor 92) 93) read an email sent on June 2013, from Shoublng Li. Finance Director for Potesses Congo SA, to Longbo Chen, CEO of Maglndustries. The e-mali was translated from Chinese to English by a certified RCMP translator. I learned that Shoubing Ll stated that Maglndustrles was in the process of hiring an accounting supervisor which ?must be based on cautious selection, overall assessment and careful consideration?. Shoublng Li would like a keen and diligent candidate in business finance and preferably would have overseas work experience. Shoubing Li discussed the situation at length with Mr. Dong and they believed that some individuals can be eliminated prior to the arrival of the new accounting supervisor. Shoubing Li named - as an example of one that should be eliminated. [i believe that 7- because of the type of financial position mentioned in this paragraph.) [i believe that Mr. Dong is Alchun Dong, Adviser to the General Manager for Mangnerais Potasses Congo SA. Alchun Dong Is known as Alice Dong] [l further believe that Shoublng Li?s opinion to eliminate was a recent decision, because i reviewed 5 work visa for the R00 and learned that it was renewed on 13", I. and valid until May 2016.] explained that he had received information from the Former CFO of ries, Will Burton. on how to anonymously report illegal or unethical incidents using an anonymous function on his Magindustries e-maii I Page 29 address. Using this tool. on July 2013. anonymously reported via email that a payment of 5.000.000 FA [$10,000 was made to a Government Official on May 2013. eXpected that the head office of Maglndustrtes would conduct an investigation on the payment. read an e-mail dated July 2013. from ?Anonymous Anonyms" which stated in French "Un paternth do 5,000,000 XAF a are felt a un membre du gaunement ta 2 ma12013?. i believe that this e-rnall was sent by 04) I read three emails dated July 2013, between Rich Morrow, Director of investor Relations and Corporate Development, Yuan Ding. Chair of the Audit Committee for Maglndustries, and Michael Gunns, Consuitani for Magindustries in Toronto regarding the anonymous message. Morrow wrote that this message obviously raised a matter which merited further investigation and would like to discuss it the foiiowing week when they would be in Congo. Ding replied to Morrow they would talk about this issue next week in Congo. On the same date, Morrow also fotwarded the information to Michael Gunns. Consultant for Maglndustries, regarding the anonymous complaint. 95) Head two e-maiis dated July 31 2013, between Michaei Gunns, Consultant for Maglndustries in Toronto and Geoff Woo, CFO of Magindustries in Toronto. Gunns sent an e-maii to Geoff Woo regarding the anonymous e-mail and that this needed to be investigated. Gunns wrote to Woo asking if he remembered the presentation they attended at the Goodman iaw firm, as they emphasized that investigations required to be thorough and complete. On the same date, Woo replied to Gunns that he would arrive in PM on August believe that the acronym is Points Nolre.] 96) In his statement. stated that Michaei Gunns, Consultant for Maglndustries came to the R00 in August 2013. At first. could not recall if he met Gunns In July or August 2013. After events and circumstances. - confirmed that his meeting with Gunns took piece after his anonymous email (after July 2013). and Gunns met at the Atlantic Palace Hotel in the R00. initially, and Gunns discussed the expropriation and the operations of the previous year. Then, Gunns asked - about any payment to Government Of?cials. decided to tell Gunns about the payment request made on May 2013. and that the amount was above the 150,000 CFA [$301.20 limit as mentioned by Moise Kokolo of PncewaterhouseCoopers. Gunns told him that he had discussed the payment previously with Kevin Stephens. Gunns also told that he met with Kokoio and Shoublng Lt. Finally, Gunns asked to see the documentation regarding the payment. Gunns advised that he would write a report to the Board of Directors to Inform them of the situation. They aiso spoke about the CFPOA and Gunns did not test it was a facilitation payment. 'fifi-iejz} confirmed that the purpose of Gunns' visit was for internal control-and to inquire if any Illegal payments were made. ch Morr and Geoff co travel to the Re ubiic of Con 03%) Page i 30 I . . .- 35 stated that: (a)Geoti Woo traveled to the R00 in order to attend the Board of Directors meeting. After his meeting with Michael Gunne. had a meeting with Geoff Woo in the ROC which lasted about 20 to 30 minutes. During this meeting, Woo told to attend Maglnduetries' Toronto office for training with respect to an accounting software to be used in Toronto and in the R00. The training coincided with the end of a Vacation in Canada; 97) in his statement, it} Rich Morrow, Director of Devetopment for Maglnduetrles in Toronto, also travelled to the ROC In August 2013. [i believe that since Geoff Woo was In the ROC andeea acting as Chief Financial Of?cer for Maglnduatriee of Toronto, he was aware of? the payment to Gonna.) ill I .Mlc eel e?ter nb 101) I read an email and attachment dated September 2013, from Rich Morrow, Director of investor Relations and Corporate Development to Nardie Smith, Human Resource for Meginduetries in Toronto. I teamed that the attachment was a notice of termination of Michael Gunne and the Gunne Group from the consulting agreement with Maglndustries. The termination would be effective thirty days from September 2013. it thanked Gunns for the terms of his consulting mandate. AL) Page i 31 102) 103) 104) i read an e-maii sent on September 2013, at 12:45 hours. from Geoff Woo, CFO of Maglndustries in Toronto, to Longbo Chen, CEO of Magindustries. discussing condition and how to terminate his employment contract. The e~mali was translated from Chinese to English. by a certi?ed RCMP translator. i learned that Geoff Woo proposed that first day at work. he would be interviewed by Shoubing Li, his immediate supervisor to enquire if he is capable of continuing to Work and to make arrangement for new tasks. Shcubing Ll would recordldocument his performance until November 181". believe that Geo?Wco developed a plan read an email sent on September 2013, at 13:37 hours. from Shoubing Ll, Finance Director for MagMinerais Potasses Congo SA to Geoff Woo regarding situation. The e-mail was translated from Chinese to English by a certi?ed RCMP transistor. I iearned that Shcubing Lt thought that Geoff woc?s plan was difficult for him to comply with. Shoubing Li stated that- was ready for dismissal because he cannot do these jobs and he was not at ail comfortable to iet him do them. Shoubing Li stated that work in ?nancial aspect cannot be qualified for the Job of Chief Accountant. Shoubing Li stated that if the company has decided to carry out the plan, he would try to make arrangement for - to do work which was not important and would not let him feet discriminated against. . - believe that 3 because of his former financial title mentioned in this prgraphJ i read the minutes of a special meeting heid on September 2013 from 09:00 hours to 10:30 hours to addressed -Z coming to work in Points Noire and related lSSues. The participants were Fuiiang Wang, Deputy General Manager for MagMinerais Potasses Congo SA, Aichun Dong, Adviser to the General Manager for MagMinerals Potasses Congo SA, and Shcubing Li, Finance Director for MagMinerals Potasses Congo SA. The document was translated from Chinese to English by a certified RCMP translator. i learned that a consensus had been reached and that it ame to work In Points Noire it would cause the following related issues and risks and for the time being. must not be to Polnte Nclre: Page I 32 had a strong radical mindset. ?in view of the previous incident of reporting, it connects with Michael Gonna who just resigned from the job. if they act together, - is likely to provide him a range of information he considers a problem during Points Noire, then the Company will suffer inceictiiabie damage or entanglement?. (0) ?Relationship with Michael Gonna, there is a big risk". it stated the [As explained earlier In this ITO, on September 2013, Michael Gunns received a notice of termination of his contract, but based on the information included in this paragraph, it appears that Gunns has resigned from his duties with MagindustriesJ __attende training and meetings in Toronto 105) in his statement, - stated that: On September 111? and 2013, he attended a two-day training session in Toronto for an accounting software provided by Rene Rotermundt. Accounting Supervisor. The main purpose of the training was to generate ?nancial statements from the accounting system; (to) On September 2013, - had a meeting with Good Woo. They discuased growth opportunities for his career and possible promotion in Toronto; (0) On September 2013, Just before return flight to the Rec, he had an unplanned meeting with Geoff Woo. Geoff Woo discussed changes in the Finance Department. He offered new employment in Toronto as Senior Accountant with a decreased salary and bene?ts, which - felt was a demotion. The employment offer was detailed in a document given to - expressed his dissatisfaction to Geoff Woo regarding the position. - than traveled to the R00. 106) I read an e-mail and an attachment sent on September 2013, from Geoff Woo, CFO of Magindustries in Tomato to Aichun Dong. Adviser to the General Manager for MagMinereIs Potasses Congo SA, Fuliang Wang, Deputy General Manager for MagMinerals Potasses Congo SA. Shoublng Li, Finance Director for MagMinerais Potasses Congo SA. copied to Nardia Smith, Human Resources for Magindustries. Rich Morrow, Director of investor Relations and Corporate Development, and Chen Longbo. CEO of Maglndustries regarding a termination letter in case did not accept their offer. Geoff Woo stated they had Page I 33 suspended his access to his e-mail and accounting system and he should be allowed supervised access to his work station only to clear out personal effects. Aiso, he should only be permitted in to the MagMinerals Potasses Congo SA office to receiveisign the ?ne! offer or the termination letter. returns to the Republic of Centre 107) in his statement. stated that when he returned to the R00, he attended MagMinerais Potasses Congo office and was not given access to his company computer and email address. Fuilang Wang. Deputy General Manager went to see - and told him to consult his personal e-mail address account, as Magindustries had sent him a revised employment offer. When he checked his personai e-mail account, he read a second employment offer with a $5,000 CAD increase in pay from the first offer_ explained that it was still $20.000 CAD less than his Chief Accountant position in the R00. As a result. replied to Geoff Woo that he is declining the offer. because it was for a tower position and salary. 108) read a memo dated September to?, 2013. addressed to Fuliang Wang, Alchun Dong and Shcubing Li and signed by Longbc Chen and Geoff Woo. The memo was from Nardia Smith. Human Resources Specialist for Maglndustries in Toronto. I learned that it was to inform them of the restructuring of the ?nance department. it stated that Shcubing Lt had been there for six months and he managed the department welt enough to eliminate the 109) i read an email and two attachments sent on September 2013, from - to Geoff Woo, copied to Nardia Smith. stated that: MAG's Senior Management and the Board of Directors of Maglndustdes were aware of Shoubing Li, MagMinerals Potasses Congo Finance Director, breaking Congolese and Canadian Law by signing ott and approving an illegal cash payment of 5,000,000 XAF [$10,040 to a Government Official on May 2013; He wondered why the company was not eliminating Li's position, since he was unquali?ed and had broken Canadian and Congolese iaw: [According to the statement of he said he never witnessed the payment being made and he also said that his former supervisor Shoubing Li is not a quali?ed accountant] [The attachments were the documents from the 6,000,000 CFA [$12,043 payments on May 2013 (APPENDICES A, and Kevin Stephens discusses how to organize an amicable situation with 110) read an e-rnaii dated September 2013, from Kevin Stephens. Risk Manager for Mangnerais Potasses Congo SA to Longbo Chen. CEO of Magindustries on how to organize an amicable situation wit . i learned that: (3) Kevin Stephens believed that the company handled the situation badly by removing malt service, physically denying him access to his P339134 JR for the past two years, had been privy to some sensitive and confidential company information such as per diem payments made to certain members of the Congolese Government, tax. other fiscal issues and flnanciai reporting/disclosure issues: Shen stated that Stephens emphasized that they needed to avoid any possibility that i might release anything of a sensitive nature to the Congolese worse. the Canadian Government. 111) in his statement, indicated that he attended a Labor Department hearing in the ROC regarding the abolition of his position. He told the Labor Department Board that he felt his position was abolished because he reported an illegal payment made by Maglndustries to a I I I He received noti?cation that his position was abolished on October 2013. - read the release signed b_ which was attached to an e-mail sent on November 2013, from Paris Didjang to Nardia Smith. Human Resources Specialist for Magindustries in Toronto. The attachment was a letter signed by - that his contract with MagMinerals Potasses Congo SA was terminated as of October 2013. i also read the release of _terminatlon of employment from Maglndustries signed by which was attached to an email sent on November 2013. from - to Nardia Smith. i read an e-maii sent on November 2013. from Longbo Chen to Nardla Smith. Geoff Woo. ore of Maglndustries in Toronto and Rich Morrow. Director of investor Relations and Corporate Development for Maglndustries?in Toronto which stated that they still needed to pay attention to his further actions. PART EUCALYPTUS Hm CONGO THE MOEEY PARAGRAPHS 11231 to 14;; 112) 113) As stated in the overview of this while reviewing documents seized at Radiant Communications, Investigators became aware of payments made by Eucalyptus Fibre Congo, another subsidiary of Magindustries. Having reasonable grounds to beiieve these payments were bribes to Foreign Public Officials. obtained a search warrant to search the data seized at Radiant Communications for additional information regarding these payments. On July 2014. i sworean before Beverly a Juatice of the Peace in the Province of Ontario and a search warrant was authorized pursuant to section 487. an assistance order pursuant to 487.02 and a sealing order pursuant to section 487.3 of the Criminai Code. A copy of this warrant is attached to this as APPENDIX D. I obtained a search warrant to search for: Any emails or electronic communications. including sent. unsent and deleted communications and their associated attachments. belonging to Maglndustdes. related to ?black money? payments made by Eucalyptus Fibre Congo; 3in Page 35 .- -. .. .. . . Any e-malls or electronic communications, including sent, unsth and deleted communications and their associated attachments belonging to Magindustrtes, related to Ernst Young; (0) BUT NOT INCLUDING any e-mails or electronic communications. including sent, unsent and deleted communications and their associated attachments . belonging to Magindustrtes, that has been previously or will be identi?ed as potentially privileged. Michael Gunng' obse?atlons after his visit to the Republic of Congo In December 2012 114) i read an e-maii and attachment sent on December 2012, from Michael Gunns, Consultant for Maglndustries in Toronto to Will Burton, Former CFO for Maglndusiries in Toronto. describing Michael Gunns? observations during his visit to the ROC in December 2012. i teamed that Michael Gunns wrote ?i was concerned in my initial discussions {before you arrived) with Fang, Albert and Hank. They seemed so overwhelmed by dey-to-day issues that i thought they wouldn?t be that interested. However, i felt we reached a lot of consensus and resonance with some practical pain they are feeling where they either don?t know what to do, or feel they are being manipulated by their own people (9.9. per diems to officials, EFC local trolke). Feng?s comment during the first discussion i had with them was: 'we have to ?x conduct issues, or we?ll hit a brick wail? [i believe Fang Is Huang Fang, Eucalyptus Fibre Congo and that Hank Is Cheng Han Yeh, Deputy General Manager of Eucalyptus Fibre Congo.] [i believe that ?per dlems to officials" are payments to Government O?lclals and that Senior Of?cers of Eucalyptus Fibre Congo discussed these payments with Michael Gunns during his visit. 1 also believe that the Toronto of?ce of Magindustrles was aware of the existence of such payments as this e-rnali was sent on December 2012. At that time, Will Burton, Former CFO, was based at the Toronto office of MagindustriesJ Ernst 8. {oung 2912 audit - Issues of unsupported documents 115) i read an email and attachment sent on March 2013, from michel.bakaia@cg.ey.com, Manager Assurance, Ernst Young (EY) Congo Brazzaville. to yong.oao@magindustries.com, Finance Director of Eucatyptus Fibre Congo, and copied to victor.ketevi@cg.ey.oom, Audit Manager at EY in Congo. The attachment is an updated version of ?Key Accounting and auditing issues? by EY and i learned that EY discovered payments that were not properly supported. Below is a reproduced table from the attachment of five payments not properly supported: Number Date Journal N?Piece Description Amount Comments 1 30ft 112012 CAI 3275 FRS DIVERS 30 000 000 NO supporting Page 6 .- . .4. .- -.. . . Number Date Journal N?Pidce Description Amount Comments DG (penallt?) document We are not able to appreciate if the payment has been made for a normal course of the company business 2 1810?l2012 CM 2106 TRANSPORT TERRE JAUNE 7' 000 000 No supporting document We are not able to I appreciate if the . payment has been made for a normal course of the company business 3 261120012 CAI 3460 FRS DIVERS HE WENLAN 5 000 000 No supporting document We are notable to appreciate it the payment has been made for a normal course of the company business 4 CAI 2152 TRANSPORT TERRE JAUN 3 000 000 No supporting document We are not able to appreciate if the payment has been made for a normal course of the company business 5 0410?12012 CAI 1968 SVT No 001260 IMBOUNOU 2 000 000 No supporting document We are not able to appreciate if the payment has been made for a normal course of the company business 47 000 600 [i believe that the amounts mentioned above are In CFA Franc currency.] [i believe that an error occurred and the total amount should read 47,000,000 [$94,000 can? Lgondeo Bekah seeks help from Yong ng to reconcile payments 116) read an email dated March 2013. at 09:15 hours from 1.0th520 Bekah, Assistant Controller in Toronto, to Yong Cao, Finance Director of Eucalyptus Fibre Congo copied to Fang Huang. Chief Executlve Officer of Eucalyptus Fibre CongoI Geoff Woo, Financial Controller for Magindustries in Toronto and Will Burton, Former CFO of Maglndustries in Toronto regarding the Eucalyptus Fibre Congo audit Issues. i learned that Loondao Bakah requested Yong Cao's help to reconcile flue amounts on the 'tray accounting and auditing issues?. Loondao Page I 37 .-.- .. . 1m Bekah wrote that the back-ups that Cari provided had different amounts and there were oniy three. believe the ?ve payments that Loondeo Bekah was trying to reconcile are the same payments described in the table of the previous paragraph] read an e-maii dated March 2013, at 09:42 hours from Loondeo Bekah to Yong Cao, copied to Will Burton and Fang Huang concerning the Eucalyptus Fibre Congo audit issues. i teamed that Loondeo Bekah requested Yong Ceo's phone number as the matter was very urgent and needed to sort it out. I read the reply on the same date at 12:20 hours by Yong Cao to Loondeo Bekah and I learned that Yong Cao provided his telephone number. Will Burton requests an update regarding the five unsupported payments 113) You 119) i read an email sent on March 2013 from William Burton. Former CFO of Magindustries based in Toronto. to Frank Phan, Manager. Assurance Services at EY in Toronto. i learned that Witt Burton sought an update concerning where EY stood with the audit. He wrote that regarding the ?infamous 5 unsupported payments? at Eucalyptus Fibre Congo, ?we have gotten the support from our people, but they have to reconcile it and give it to the Congo auditors?. Will Burton stated that one of the payments for 30 million CFA [$60,000 related to an under the tabie payment to the tax authorities. 0 describes the five mone a ments 1 read an email dated March 2013, from Yong Cao, Finance Director of Eucaiyptus Fibre Congo, to Loondeo Bekah, Assistant Controller for Maglndustries in Toronto and viotor.ketevi@og.ey.com, Audit Manager at EY in Congo copied to Feng Huang, CEO of Eucalyptus Fibre Congo. Yong Cao described what he referred to as the bank payments without supporting documents as follows: 30,000,000 Foia [$60,000 ("black money", no supporting documents) 35,72?,324 Feta (?white money", supporting documents a?aohedh [$14,000 Fcfa ("black money?, no supporting documents) +13,052,700 Feta (?White money: supporting documents attached); (0) 5,000,000 Fcta [$10,000 ("black money', no supporting documents) +2,506,559 Fcfa (?white money?, supporting documents attached): 3,000,000 Foia [$6.000 ("black money?, no supporting documents) 0 Fcfa ("white mensY', supporting documents attached); 2,000,000 Fcfa [$4,000 (?White money?, for land rental, attached). [i believe that the ?ve payments described In this paragraph are the same as those mentioned in the table of paragraph 115.] E) Page i 38 .. Water Keteyi mentions biack money payments 120) I read an email dated March 20th, 2013, from Victor Ketevl. Audit Manager at EY in Congo to Yong Cao, Finance Director of Eucalyptus Fibre Congo copied to Fang Huang. CEO of Eucalyptus Fibre Congo, Loondeo Bekah, Assistant Controller for Maginduatries in Toronto, Wiil Burton, Former CFO of Maglndustnes in Toronto. Geoff Woo and Ashraf.2ineidin@ca.ey.com. Partner in . Assurance Services at EY in Toronto regarding the ?black money" payments. I teamed that Victor Ketevi wrote to Yong that the ?biaxk? money could not be considered as ?made for business purpose". Victor Ketevi stated that they had to expense around 35 million? Also, the ?black money? paid would be included in their representation letter. [As it will be described later in this ITO, a representation letter is usually obtained by the auditor at the end of the audit. On July 2014, I spoke to Patricia Odlerna, Senior Forensic Accountant, and I learned that it is a common practice for the auditors to prepare the format of the tetter-and to send it to the client, but the content of the letter remains the management's responsibllity.] [Patricia Odlerna Is a Chartered Professionai Accountant, Chartered Accountant (CPA, CA), Chartered Business Veluator_(CBV) with a Certi?ed in Financial Forensics (CFF) credential from the American Institute of CPAs working with Pubiic Works Government Services Canada yigtgr Ketevt seeks signature on the Letter of Representation for; Eucalyptus Elms Congo 121) i read an e-maii and attachment sent on March 2013, from Victor Ketevi, Audit Manager at EY in Congo to Loondeo Bekah, Assistant Controiler for Magindustries in Toronto copied to Yong Cab, Finance Director of Eucalyptus Fibre Congo and Fang Huang, CEO of Eucalyptus Fibre Congo. I learned that Victor Ketevi advised that the audit procedures for ?ood! year 2012 were completed. Victor Ketevi requested that the representation letter attached to his e-mali be signed by Eucaiyptus Fibre Congo management and returned to him. srofR resent on at db Fen Huan and Burton 122) read an attachment sent from Michael Gunns. Consultant for MaglndUStdes In Toronto to himself, copied to Rich Morrow. Director of investor Rotations and Corporate Development which is a Letter of Representation signed by Feng Huang (Eucalyptus Fibre Congo CEO) and Will Burton (Magindustries CFO) dated March 215?, 2013. read an appendix to the Letter of Representation in rotation to the reporting ?nancial statements as of December 319?. 2012. and I teamed that a list of transactions without supporting transactions was enumerated. Beiow is a reproduced table from the attachment of the five transactions listed as "payments not properly supported?: lg - Page i 39 mung -. . -..-.. . [in March 2013, as per the Letter of Representation, eight payments were first identi?ed as unsupported. Later, it was determined that three cash payments were later supported with proper documentation] Number Date Journal N?Pi?ce Description Amount Comments 1 30? 1112012 CAI 3275 FRS DIVERS 30 000 000 This black money DG (p?nalite) for tax audit notification 2 18l07!2012 CAI 2106 TRANSPORT 000 000 This black money TERRE JAUNE for personal income tax noti?cation 3 26/132012 3460 FRS DIVERS 5 000 000 This black money HE WENLAN for social insurance noti?cation 4 2410712012 CAI 2152 TRANSPORT 3 000 000 This black money TERRE JAUNE for consumption, competition and fraud services 5 0410712012 1968 2 000 000 SVT No 001260 47 000 600 [i believe that the amounts mentioned above are In CFA Franc currench believe that an error occurred and the total amount should read 47,000,000 [594,000 Resignation of C. Burton Director of Eucalyptus Fibre Congo 123) read a Director?s resignation letter with immediate effect dated March 2013. from William C. Burton to Eucalyptus Fibre Congo. This letter was executed and delivered as 'a deed in the presence of the witness and signed by Michael Gunne, Chartered Accountant (FCA). . 36? Page i 40 124) i read an e-mail and attachment sent on March 2013, from Ashraf Zineidln, Canadian partner of El in Toronto to Will Burton. The attachment was an audit report from EY presenting the results of its audit of the 2012 consolidated ?nancial statements of Magindustries. I learned the following from the audit report: (alMaginduetries had significant deficiencies in internat control over financial reporting in the ROC. it was noted that some of the reporting operations were not operating as designed; specifically, in relation to the supporting documentation for entry payments. it also stated that the amounts involved were not material and that it could result in fraudulent acts. It also mentioned that the overriding of controls In the R00 operations represented a signi?cant de?ciency and required corrective actions to be taken by the management; There is a table titled ?Summary of audit differences" which described the differences betvveen the amounts recorded by Eucalyptus Fibre Congo and the amounts EY believed should be recorded or reported. The table is divided into two sections. The ?rst one is referred to as corrected misstatements and the second one as uncorrected misstatements made by Eucalyptus Fibre Congo. accessed the CPA Canada Handbook - Assurance. glossary of terms website at and i learned that the term misstatement is ?a difference between the amount, classi?cation, presentation, or disclosure of a reported financial statement item and the amount, classi?cation, presentation, or disclosure that is required for the item to be in accordance with the applicable ?nancial reporting framework. Mlssiatements can arise from error or [On July 2014, i discussed the term fraud with Patricia Odlerna, Senior Forensic Accountant and she provided a de?nition of fraud from the CPA Canada Handbook - Assurance, glossary of terms. i learned that the term fraud is ?an intentional act by one or more individuals among management, those charged with governance, employees, or third parties, involving the use of deception to obtain an unjust or illegal advantage?.] believe that the company did not correct all misstatements found by auditors.] In the appendix of the report, it was mentioned that EY was not aware of any fraud or illegal acts lnvoiving senior management or fraud or illegal acts that caused a material misstatement or the financial statements. [On October 2014, spoke to Patricia Odiema, Senior Forensic Accountant, and i learned that when auditors discover misstatements, they may evaluate the value of the misstatement and their impact on the financial statement, based on their professional Judgment] Conference call Review of the audit findings 125) I read an e-mait and attachment sent on March 269?, 2013, of the minutes of a conference call that took place on the same day at 10:00 hours between Yuan Page i 41 if .Ding as Chairman of Meglndustrtes' Audit Committee, Ashraf Zineidin as Audit Partner and Rich Morrow as Secretary of the meeting. I learned that Yuan Ding had received the package and reviewed all documents that had been sent out. Ashrei Zineidin noted general satisfaction with Meg?s ?nancial accounting systems and internal controls but noted audit ?ndings In the Maglvilnerals Potasses Congo SA office in Points Noire, which required further management attention. Auditors detected payments to employees without supporting documents. These payments were advanced to employees and were Included in other receivables. Yuan Ding would share the information to the Board and request a plan from the Management to rectify these issues. [i believe that the acronym ls Audit Committee, since Ashraf Zineldln Is referring to the Audit Committee Packaged further believe that Aehraf Zineldin meant Eucalyptus Fibre Congo office and not MagMinerals Petasses Congo SA. Michaei Gunns later clarified this in an e-mail dated May 9th. 2013.] [i believe that when individuals use in an e-meil included in this they are referring to Ernst &Young.] Michael Gunne? concern 331th the code of conduct 126) i read an e-rnaii dated March 28th, 2013, from Michael Gunns. Consultant for Maglndustries in Toronto to Rich Morrow, Director of investor Relations and Corporate Development and I learned that he listed several items to discuss with Rich Morrow before Rich Morrow meets with Mr. Chen. Gunns emphasized the code of conduct. The code of conduct was a signi?cant focus for the trip that he (Michael Gunns) made with Will to the R00 in December 2012. Michael Gunns mentioned the implementation of the whistle-blower program was a ?long suit" and it was decided that he would start preparing suitable local codes when the year-end financleis had been completed. Gunns would also prepare examples to guide tricky decisions. Since it was a deep concern for the leaders of Eucalyptus Fibre Congo and Mangnerals Potasses Congo SA. Will was to craft examples around the use of payments. [i believe that Mr. Chen Is Lengbo Chen, CEO of MaglndustriesJ [Facilitation payment Is a term used in the CFPOA to describe legal payments under the Act. i believe that Eucalyptus Fibre Congo and MagMinerals Potasses Congo SA were facing issues regarding payment to Government Of?cials as detailed in paragraph 114 and that the Former CFO of Maglndustries, Will Burton was to prepare examples around facilitation payments to guide management of Maglndustries subsidiaries in the believe that Will is Will Burton. because Michael Gunns and Will Burton travelled to the R00 in December 2012. Refer to the paragraph 114 in this AB Page 42 . . . .. ?n . .u-Mmm Michael Gunns reguests Geoff Woe to review items with Yong Gag. Financial Director of Eucalyptus Fibre Congo 127) i read an e-mall dated April 2013. from Michael Gunns. Consultant for Magindustries in Toronto to Geoff Woo, CFO of Maglndustries. copied to Rich Morrow, Director of Investor Relations and Corporate Development in Toronto regarding the Eucalyptus Fibre COngo payments. i learned that Gunns wrote that the way the items raised by the Toronto EY partner with the Chair of the Audit Committee were not described correctly as they were first described as reiating to MagMinerais Potasses Congo SA and the explanation was something like 'peyments were advanced to employees and were included in other receivables?. Gunns discussed these matters in general terms with the Chair of the Audit Committee who wanted a tail description for distribution to the Board and for subsequent discussion between the Board and Management. Gunns asked Geoff to discuss the items with Cao and to contact him by e-mail after. in order to have another telephone discussion. Gunns stated that It may turn out that there was nothing to be concerned about regarding the nature of the payments. soffW firm Me as! arms a the ucal sFi soon hiagk payments 128) I read an e-mail dated April 2013. from Geoff Woo, CFO of Meglndustries in Toronto, to Michael Gunns. Consultant for Magindustries in Toronto. I learned that Woo had a meeting that day with Feng Huang. CEO of Eucalyptus Fibre Congo and Yong Cao. Financial Director of Eucalyptus Fibre Congo. Woo stated that Eucalyptus Fibre Congo had ?its shortcomings in personal income tax in accordance with Congo tax regulations". Eucalyptus Fibre Congo "paid the black money in exchange for cost-ef?ciency?. Geoff Woo also mentioned that a detailed report was being drafted by Eucalyptus Fibre Congo which would be sent to Gunns. ucal us Ft re Con black mo 9 re 0 129) i read four e-mails between Michaei Gunns, Consultant for Maglndustries. and Geoff Woo. CFO of Meglndustries in Toronto. as well as an e-mall from Gunns to Yue Ma, Corporate Development Associate for Maglndustrles in Toronto. The s- malls are summarized as follows. On April 2013, Gunns asked if the initial draft report could only be sent to him. Geoff Woo replied that that he would send the report to Mr. Chen and to Gunns after his review. Woo said that he did not want to send it directly to Dr. Ding as Gunns might be the most appropriate person to facilitate. On May 2013, Gunns wondered if there was any more news with respect to the report. Woe replied that he just got it in the morning. Woo wanted to modify the English version for him (Gunns). but due to the urgency, he sent the report to Gunns and he (Gunns) may ask for Yue?s assistance if the English translation was unciear. On the same date. Gunns sent an e-mail to Yue Ma, Corporate Development Associate for Maglndustries in Toronto. Gunns requested her assistance to translate the Chinese spreedsheef Page i 43 and to return it to him. Gunns stated that it was important that the translation was fairly accurate and complete. believe that Mlchaet Gunns referred to the draft report discussed in this paragraph about the ?black money" payments] [i believe that Dr. Ding is Yuan Ding and Mr. Chen is Longbo Chen, both members of the Board of Directors of Magindustrlee.] 130) i read an e-mall and attachment titled tax issue 20130506 (APPENDIX E) sent on May 2013, from Yue Ma, Maglndustries based in Toronto, to Michael Gunns, which summarized as follows: For the year 2012, the total amount that should have been imposed to Eucalyptus Fibre Congo {or the taxable staff benefit items was 63,967,818 CFA in reality. a total amount of 17 million CFA [$34,000 was paid; 6 million [$12,000 was paid under the table and 11 million {$22,000 was paid above board. resulting in savings of 46 million CFA [$92,000 it described the ways to wash "black money? as follows: Finance Department should have two sets of books, one for government inspection and one for internal use. Main finance and HR positions must be occupied by Chinese employees; (it) Have a third party pay the under the-table amount. The third party then bills a consulting fee to Eucalyptus Fibre Congo; Evergreen sets up a consulting company in Ponit-Noire to proceed with such transactions. believe that "Ponit-Noire" is a typographical error and should read Points Noire.] [i believe that payments above board are payments to the government and ?under the table?I or "black money" payments are made to Congolese Government Of?cials. i also believe that since taxes are normally handled by a country, oniy Public Officials would have the authority to settle an amount owed to the government] believe that by having Evergreen create a consulting company in Points Noire to pay the ?black money?, Maglndustrles of?cials were trying to distance themselves and the company from these payments] Yo Cao omme tsonth hill on GFA lackmone a men 131) I read an e-maii dated May 2013, from Yong Cao. Finance Director of Eucalyptus Fibre Congo, to Geoff Woo. CFO of Maglndustries In Toronto. and Fang Huang, CEO of Eucalyptus Fibre Congo, copied to Chen Longbo, CEO of Magindustries. Michael Gunns. Consultant for Maglndustries in Toronto, and Rich Morrow. Director of investor Rotations and Corporate Development for Maglnduslries in Toronto. regarding the Eucalyptus Fibre Congo report. Yong Cao mentioned that the attached with the yellow marks signified the "black money? that was paid in the year 2012 but the taxable period beionged to the years from 2008 to 2011. Yong Cao stated that his report submitted on Tuesday Page 44 wry-? 1 . -..-. . .-- .. - .-.-. . of that week belonged to the year 2012. but it was actually paid in the year 2013. In the 1?1 quarter totai with the BM CFA [$12,000 ?black money? and 11M CFA [$22,000 "white money?. believe that the report referred to by Yong Cao is the report titled tax issue 20130506 explained in the previous paragraph. i further believe that the 6M CFA [$12,000 payment paid In the 1" QTR of the year 2013 was not identi?ed during the EY 2012 audit.] Michael Gunns? follow-up on Yong Cao?s report 132) i read an e-maii dated May 2013, from Michael Gunns. Consultant for Maglndustries to Yong Cao, Finance Director of Eucalyptus Fibre Congo, copied to Chen Longbo, CEO of Maglndusiries, Rich Morrow, Director of investor Relations and Corporate Development, Geoff Woo! CFO of Magindustries and Fang Huang, CEO of Eucaiyptus Fibre Congo concerning the Fibre Congo report. which is summarized as follows: (a)Michaet Gunns wrote that Yong Cao?s report addressed FCFA 6 million [$12,000 out of at least FCFA 47 million [$94,000 described in the letter and that it did not relate to any specific items listed by in light of the wording "black money" in the letter, Michael Gunns and Rich Morrow decided to advise Dr. Ding about the nature of the transactions and how they were described by Congo: to) Michael Gunns mentioned that Dr. Ding understands that business practices in the Congo differ from those in other parts of the world with the ROC ranking very low on the World Transparency Index. As a Canadian public company. MAG is under regulatory scrutiny and this matter of settling claims may be typicai iocaiiy but its continuation was putting MAG at a very serious risk; [i believe the World Transparency index is a corruption index calculated by transparency internationai.] Dr. Ding asked that a full description of the payments and the circumstances. ?be sent to him for discussion with the Board. Dr. Ding made it clear that this document should speak plainly to the matters, so that the Board may make informed decisions; Michael Gunns visited Eucalyptus Fibre Congo in December 2012 and said that Fang Huang was distressed over these business practices. Michael Gunns was also aware that these matters occurred before Yong Cao joined Fibre Congo: [Also, as described in paragraph 114 (where Michael Gunns and Will Burton went to the R06), i believe that Fang Huang was distressed over business practice each as per diems to Government Officials] Michael Gunne wrote they were left with no choice but to fully explain all the items listed by I Page i 45 .-. 133) i read an e-mail dated May 2013, from Michael Gunns to Rich Morrow. i 134) 135) learned that: Michael Gunns requested permission from Rich Morrow to send Dr. Ding the e-mall he Just sent to Cao Yong (Cari). Michael Gunns mentioned that due to Carl copying in Chen and Becky, this Issue was getting a much higher profile; Mlchaei Gunns also mentioned writing a ?white paper? to explain Why corruption and safety are in the top of the minds of Canadians. Later, Gunns referred to SNC-Lavatin and the corrupt payments. believe that Michael Gunns Was referring to the e-mail mentioned In the previous paragraph because both e-malle were sent on the same day-i i read an e-mail dated May 2013, from Yong Cao to Michael Gunns, copied to Chen Longbo, Rich Morrow, Geoff Woo and Fang Huang. Yong Cao clarified that the FCFA 6 million [$12,000 was paid in a different taxable period. The letter by listed the period belongs before the year 2012. It should have been paid before the year 2012 for the taxable items as per the iooal tax rule. except for one ?black monew- payment of 3M CFA [$6,000 paid to the "commerce administration department?. i read an email dated May 2013, from Michael Gunns to Yong Cao, copied to Chen Longbo, Rich Morrow, Director of Investor Relations and Corporate Development in Toronto, Geoff Woo, CFO of Maglndustries in Toronto and Feng Huang. Gunns asked about the item totaling 45 million FCFA [$90,000 pertaining to the "black money? route. Gunns asked Yong Cao if he had any estimate of the full amounts if it had not gone into the "black money? route. Michael Gunns informs Ding about the Questionable garments made by Eucalyptus Fibre Congg in 2012 136) i read an e-mail and attachment sent on May 2013, from Michaet Gunns, Consultant for Maglndustries to Yuan Ding, Chair of the Audit Committee for Maglndustries, copied to Rich Morrow, Director of Investor Relations and Corporate Development regarding the Eucalyptus unsupported payments made in 2012. iiearnsd that: Their enquiries continued concerning the questionable payments made by Eucalyptus Fibre Congo in 2012. Michael Gunns wrote that Rich Morrow would be meeting with Simon and his intentions were to raise the whole issue; believe that Simon Ie Xiaolel (Simon) Llang, Chairman of the Board of Directors for Maginduetrleed (to) Michael Gunns wrote that another payment was made in 2013 concerning a? tax audit of payroll deductions of FCFA 63,967,318 He stated that "through under table deal, we ?nally paid total 17 million FCFA (black money 6 million FCFA and while money 11 million FCFA), total cost as ving 46 million AR Page 46 hwy; m. .. i??uun?n-nl? .. .. Yong Geo describes black money payments and benefit for the compg ny 137) I read an e-maii dated May 2013, from Yong Cao, Finance Director of Eucalyptus Fibre Congo to Michael Gunns, Consultant for Maglndustries in Toronto, copied to Chen Longbo, CEO of Maglndustries, Rich Morrow, Director of investor Relations and Corporate Development in Toronto, Geoff Woo. CFO of Maglndustries in Toronto, and Feng Huang. CEO of Eucalyptus Fibre Congo to clarify Gunns' questions about the "black moneY' payments. Yong Cao revealed that apart from the items using ?black money? solution, no other payment occurred in 2012 except for payments made to police for vehicle and traf?c problems but not big amounts and it was popular locally. Yong Cao ciarified the total of the 45M GFA [$90,000 ?black money" as follows: For the tax Inspection of year 2008-2010, Eucalyptus Fibre Congo paid 30M CFA [$60,000 of ?black money? and approximately 36M CFA [$72,000 to government. Eucalyptus Fibre Congo should have paid an amount of 148M CFA [$293,000 For the tax inspection of year 2011, Fibre Congo paid 7M CFA [$14,000 of ?black money? and 13M CFA [$26,000 to government. Eucaiyptus Fibre Congo shouid have paid an amount around 130M CFA [$360,000 - For the social secure inspection of year 2011, Eucalyptus Fibre Congo paid 5M CFA [$10,000 of ?black money' and 2.5M CFA [$5,000 to government. Eucalyptus Fibre Congo should have paid an amount around 50M CFA [100,000 For the inspection from commerce administration bureau for business documents integrity checking. Eucaiyptus Fibre Congo paid 3M CFA [$6,000 of "biack money?. Eucalyptus Fibre Congo should have paid an amount around 30M CFA [60.000 [i believe based on the amounts and the sequence of the e-malis described in this 1T0 that the above payments are four of the payments identi?ed in the audit report and that "white money? payments as referred previously in this are payments made legitimately to the government] Michael Gunns segks an update go the Eucalyptus Fibre Congo black money payments 138) i read an email dated August 2013, from Michael Gunns, Consultant for Maglndustries to Yong Cao. Finance Director of-Eucalyptus Fibre oongo, copied to Fang Huang, CEO of Eucalyptus Fibre Congo, Chen Longbo, CEO of Magindustries, and Geoff Woo, CFO of Magindustrles in Toronto, requesting an urgent update regarding the Eucalyptus Fibre Congo "black money? payments. Michael Gunns wrote that the Board of Directors and the Audit Committee would be meeting on Saturday in PNR. The Chair of the Audit Committee would iikely ask for an update on the type of payments mentioned above and asked if any other black payments were made since. Michael Gunns mentioned that Yong Page i 47 . .. u. Cao told him about one payment in the report for the year 2013 for an amount of 6M CFA [$12,000 of ?black money" and 11M CFA [$22,000 of "white money" even though the period belonged to the year 2012. believe that the 8 million CFA [$12,000 ?black money" payment for the year 2013 Is the same as the one described in this 1T0 by Yong Cao on May 2013.] accessed the airline and airport code search website at and I learned that the acronym signi?es Pointe Moire. PRN is the three letter city code letrport code for Points Noire airport] 2013 Audit Plan 139) i read an e-mall and attachment sent on November 2013, which contained Maglndustries? Corporate 2013 Audit Plan with a letter dated November 2013, by Ashref Zineidin, Canadian Partner at EY in Toronto. I teamed that EY conducted a full scope audit on the following locations for the year 2012 and 2013: MaglndUstries Corporate in Canada; MagMinerals Potasses in Congo: (0) Eucalyptus Fibre Congo in Congo. [As will be described tater In this ITO. a full scope audit requires that the auditor select a larger sample for its audit testing, which means a higher percentage of the amount and disclosure to veriny Forensic Accounting Management Group - Patricla Odlerna 140) On June 2014, I met with Patricia Odierne, Senior Forensic Accountant. to discuss this investigation, how an audit is usUaily conducted, and to obtain an explanation of certain documents prepared bylfor EY. iearned that: (a)Magindustrtes is a pubticiy traded company and it is required to produce annually audited financiat statements Usually, during the audit. the auditor will not obtain audit evidence for every amount in disclosure; typiceiiy, a sample is selected by the auditor based on its assessment of risk and its determination of materiality, Usualiy. a full scope audit entails that the auditor select a iarger sample for its audit testing. meaning a higher percentage of the amount and disclosure to verify; if during the audit, the auditor (EY) finds a misstatement. it wilt usually be reported in the summary of misstatements. If such a misstatement is determined to be material by the auditor, the company wlil be asked to correct it. When misstatements are found, the auditor may eiso decide to increase the sample seiectton for the audit testing. Page i 48 .. .. .nhu imM-v? AM A. .4. 9-. u-n-u- r?il?nawmwwa . a (imitation of the bias one a ments and the financial advanta for Eucalyptus Fibre Congo 141) i read a report dated June 2014. prepared by Patricia Odiema. Based on the evidence gathered in this investigation and provided to her, Patricia Odlerna prepared a report regarding the ?nancial advantage for Eucalyptus Fibre Congo as a result of the ?black money? payments made, presumably to Congolese public of?cials. Below is a table copied from her report. Pregnt Alon [proim 20134301025} Sch-eduh em;th to ?rant humid comma to ?ahctaeety _r .I 93": "exit: ?.mm?gzi? Mimosa eat!? men "one! or ?riisa meow? Intel been lute?e mm. I "a 8? mm? m9? numm.? cramp: curiae - Eml?tmzj Tasman: Dr. aim-W: -. . munmm?m??mmu?memmr Leo-am neonate moqu meme? teem-mo: mace new tm?m?m no tied it! came: . .. . . . mamdl??dtemm? 5,000.on .-2..5LP.0W Mam -. some? wet-am: Issac-t were HummrdetMarss303.009 3.9mm mmwo 27.9mm} upon sec-e MHZ to decaf-ms Ea 53;?ch . . Hemmaummrl? {memo "more: rut an moo, mama-gee .- . - -- - I . - . nomadtrucammr." St 599 61.509335 ?3.131.050 ?amigo 033.000 l0 2,600 item: I i Ruumwh?hmueom?. - 1 poems, rune? weaker it. 201.1 20$! deem ?doom rm - -- - believe that 51 mililon CFA [$102,000,000 to the combination of the four "black money" payments included in the Letter of Representation totaling 45 million CFA plus the "black money" payment of 6 million CFA [$12,000 Identified in an e-mali by Yong Cao.] spoke to Patricia Odierna, and i learned that she did not mention the ?nancial advantage for the 8 million CFA [$12,000 payment above In Schedule 1.2 as it was not included in the email titled "Follow up on EFC The advantage for that speci?c payment is described below in Schedule 1.4, and was calculated from the e-maii titled ?Discussion with Geo-short translatepdi?kl believe that the 6 million CFA [$12,000 in Schedules 1.2 and 1.4 is the same ?black money" payment. In total, ?ve ?black money" payments were found totaling 51 million CFA [$102,000,000 SSE Page 49 .t .. . Project Alon {prams Zeta-1mm} 1.4 Maura: petal Returns! to I Rotate-1n on the some docs-316:1 lost: ?can ?e?tj'gf W?kgy'm {om momma? magimr'? 'bbtl?aa??" 'encl mmy?me'mamsu'uul magnesia salesman; mm? ?momma neuron?! 'am?m- to L?Hib?riiktll??gems tenants -I 93.915. I ?tmwn ??summon.- 'nmInemmaarr - . . - - nmgrumg?bh?tuetu?-ys?im' ?aim 11mm Inc's??ea assume {mum Mats mutt I "can QM?fo ?mealtimes? tonne tours! toe; . . - -- The report states that ?the ?nanclal advantage for EFC of paylng the alleged brlbes was determined by calculating the difference between the amounts that should have been paid by EFC to the government and the amounts actually pet Below is Table 2, which consists of the calculations by adding the amounts outlined by transaction in schedule 1.2 and 1.4. ?The total financial advantage to Eucalyptus Fibre Congo by paying the alleged bribes based on the calculations presented in Table 2 could amount to 358.5% CPA (or $716,935 [Based on the evidence gathered to date respecting the "black money" payments made by Eucalyptus Fibre Congo, a subsidiary of Maglndustrtes gatnecl a financial advantage by evading taxes as outlined In Patricia Odlerna'e report. Although the recipientls) of the "black money" Islare unknown, one can Inter that this person was a public official in the ROC, or someone acting on behalf of a public of?cial since the of tax collection is a government function in the Table z:I Summawot total financial advantage to EFC of alleged ?blarkmoney? transactions per source documents Totalitneuotelauvhnlageto EFG. CM Franc GAD (Note 11 Enlememenausmmadocement cascades . mane AppondleIEll?han?e documentenlillod ascents 93.935 Schedule 1.4 Appendix 0' ?DIIsoese'Icn with Geo-short translate pdl' Iota! 353,407,319 716,935 Note: it'ConvarteId by FAMIG Iat the December 31, 2012 closing exchange 'ra'te'. The Decembcrel, 2012 closing exchange tale was: 500 CFA Franc .. 1 CAD Slsoun?u: Bani: of Canada). Re ort fPatricl Odlerna descrihin audit eta derds as eduree 142) i read the same report dated June 2014, written by Patricia Odlerna, as mentioned in paragraph 141 and teamed that: (a)An audItOr must follow the ?Canadian Auditing Standards" (OAS) general guldellnes to meet professional concerning the audit of ?nancial statements. An auditor may turn to other authoritative sources. although GAS are the authoritative auditing pronouncement: s'g; Page I 50 .-. . .mwmma'. tau-- - .. w. The auditor's responsibility is not to prepare the ?nancial statements, but it consists of expressing an opinion on the ?nancial statements, to provide assurance that the ?nancial statements are presented fairly; The auditor will not obtain audit evidence for every amount and disclosure. sample is selected by the auditor based on its assessment of risk and its determination ofmaierlalily?. The auditor usually makes a judgment about the size of misstatements that will be considered materiality. If_ the auditor assesses a low level for the materiality, it means that the auditor will accept fewer misstatements. A full scope audit or lower materiality usu-aily entails a larger sample selection for the veri?cations done by the auditors. read the 2012 audit results report for Eucalyptus Fibre Congo made by EY and it mentioned that the auditors completed a full scope audit] (d)The auditor keeps an audit file for each audit and relevant audit evidence obtained must be documented. The documentation should include the following: he engagement letter; (ii) Planning of the audit; Assessment of independence and gen erai quali?cations; (lv)Assessmeni of the risks of material misstatements; Assessment of internal control in order to design appropriate audit procedures; (viMudlt procedures and evidence obtained; (vibSubsequent events or other special considerations; (viiDA Management representation letter?; A management representation letter is usually obtained by the auditor at the if) end of the audit. he letter is prepared by management and includes written representations that it has fulfilled its responsibilities for the preparation of the financial statements and for the completeness of the information provided to the auditor?. ?ill/hen auditing consolidated ?nancial statements, the auditor may decide to perform or request the auditor oi the subsidiaries to perform, an audit of speci?c account balances or transactions that are identified as risky. Forms of involvement in the work of the subsidiaries auditor vary and may include, among others, meetings with the subsidiaries? management or their auditors to obtain an understanding of the company and its environment, perform risk assessment procedures to determine the risks of material misstatement at the subsidiary level, design and perform further audit procedures, review overall audit strategy, review relevant audit documentation, participate in key meetings, etc?i [i believe that EY participated in key meetings with regard to the payments without supporting documents as mentioned in this ITO under the heading "Conference Cali Review Of The Audit Findings".] (9) At the end of the audit. the auditor must report its ?ndings to the people in charge of governance in'the company, like the Board of Directors. ?Usually, the Board of Directors will elect a subgroup, the audit committee, to be Page i 51 .. um. mum--responsible? for the oversight of reviewing the financial statements and ?recommending their approval to the Board of Directors: as well as "recommending the election of the independent auditors, discussing the progress and findings of the audit? and reviewing internal controls. The auditor will usueily prepare a document for the audit committee that summarizes Its audit findings and present it during a meeting in which members of the audit committee can ask questions. Ma industries and ichaelG nns' Involvement 143) The following paragraphs describe some of Michael Gunns? actions as Maglndustries' governance specialist. Although they could not be directly associated with either the payment to Ej inc the ROC or the "black money? payments made by Eucalyptus Fibre Congo, they are relevant to this investigation to demonstrate that during this specific time in 2013, Maglndustries faced conduct issues regarding corrupt payments made by its employees. The information below shows that Gunns placed a lot of importance on the topic of corruption and as described in this he received a notice of termination of his contract in September 2013. Michael Gunns sends the proposed amendment of the Corruption of Foreign O?icia?ie Act 144) read an e-mail and attachment sent on February 2013, from Michael Gunns to Will Burton to inform him of the proposed amendment to the Corruption of Foreign Officials Act. Gunns referred to a key section, called ?facilitation payments are prohibited? and wrote that It did not mean that the amendment would pass. [i believe that the Corruption of Foreign O?'iciels Act is the same as the CFPOAJ Risk and compliance materials - Michael Gunne 145) read an email dated July 2013, from Michael Gunns with attached documents to Geoff Woo, CFO of Maglndustries in Toronto suggesting he study them in a particular order before their meeting and start planning their approach. The attachments consisted of the foilowing: (aiA 2012 report from the US State Department regarding the climate in the ROC. Michael Gunns thought of it as part of the briefing material for the Board in August and wrote that Rich confirmed that the report is credible and useful; presentation by McCarthy's. a Canadian ,Law Firm. pertaining to the proposed amendments to Canada's Corruption of Pubiic Of?cials Act. Michael Gunns drew attention to the compiiance programs and the tor the acts of agents and business partners. to) An article from Canadian Business dated February 2013, in relation to two recent highly-publicized Canadian cases involving the A52 Page 52 . ham-r. ?man-c. - . -.-. an(d)A link to the Transparency international site. which Indicated that the assessment ranked the R00 144 out of 176; [On September 11th, 2014, accessed the Transparency international Site at and I learned that the assessment ranked the R00 154 out of 177.] A cepy of the reports including the risk survey and the risk approach which Michael Gunns provided to the Board at their meeting in Toronto in June 2012; A copy of the PowerPoint presentation made to the Board In June 2012; The materials given at the Goodman?s session which they attended on June [i believe that Geoff Woo and Michael Gunns attended the Goodman's session on June 2013, as Rich Morrow authorized them to attend] [i further believe that Michael Gunns was concerned about corruption since he emphasized the subject of bribery and provided all this documentation in preparation for their next meeting to start preparing their approach.] Michael Gunns seeks permission to attend an anti-corruption presentation in Toronto 146) read two emails dated June 2013, between Michael Gunns and Rich Morrow. Director of investor Relations and Corporate Development. regarding an upcoming anti-corruption presentation by Goodmans LLP in Toronto. Michael Gunns mentioned that the presentation was well-timed. He stated that sending too many people may not took ?too cool". Michael Gunns thought that Lucy. Geoff and he should go and he could brief them on what to say if they were asked why they were attending. Michael Gunns would register those who are going to the presentation. Rich Morrow agreed and wrote to Michael Game to go ahead and register. believe that on the date this email was sent, Michael Gunns and Rich Morrow did not know about the payment made on May 2013, to the ?1 Therefore. i believe that Michaei Gunns wished to attend this conference and mentioned that it was well-timed because at the time the email was sent, Maglndustrles had been dealing with the black money payments made by Eucalyptus Fibre Congo.] Anti-bribery legislation PowerPoint from Michael Gunns 147) read an e-mail dated July 2013. from Michael Gunns, Consultant for Magindustries, to Rich Morrow. Director of Investor Relations and Corporate Development. i learned that Michaei Gunns included a covering note, a PowerPoint presentation, and the 2012 report prepared by the US. State Department regarding the investment Cilmate in the R00 that he wished to later send to the Board. The covering note stated that a presentation would be attached and the primary topic would be the Anti-Bribery Legislation and??ity Page 53 148) Impact. Michael Gunne stated it was ?a very important and complex one, with considerable implications?. i read an e-mall and attachments sent on July 2013, from Michael Game to Geoff Woo, CFO of Maglndustries in Toronto. The e-mail included the proposed covering note and the attachments previously sent to Rich Morrow. One of the attachments was the Anti-Bribery Legislation PowerPoint presentation containing 24 slides titled Risk Aug 2013 Audit Board.pdf? prepared for the Audit Committee and Board meeting in August 2013 by Michael Gunns. One slide mentioned that an Update of Control Environment of MagMinerais Potasses Congo SA, Eucalyptus Fibre Congo. Toronto, etc. would be presented separately by Geoff Woo. The presentation dealt with the topics of the updated CFPOA, the corruption risk of the R00 and facilitation payments. it also analyzed Canadian CFPOA court cases Niko Resources. 2011 and Griffiths. 2013. it pointed out the difference between the fine and restriction put on the company based on how the company reacted to the illegal payment and their degree of cooperation. It noted that all law enforcement agencies take the view that the appropriate level of tolerance towards bribery is zero. [i believe that Geoff Woo may also have presented to the Board of Directors in August 2013. along with Mlchaei Gunns. Michael Gunns suggested to Geoff Woe to not include certain slides in his presentation in order to not lose the focus on the bribery topic.] Governance issues October 2013 149) read an e?maii and three attachments, sent on October 2013, from Michaei Gunns to Rich Morrow, Director of investor Relations and Corporate Development. teamed that Michael Gunns put importance on one of the attachments titled Priorities Oct 2013.pdt". The document described the summary of the most outstanding governance matters for Magindustries as of October 2013. The items were written In order of importance and items one to three required an immediate attention. One of the most urgent matters listed under the risk management was the Anti-Bribery. The report stated that the CEO instructed at the Board meeting in August 2013 that transactions and activities that Would violate the CFPOA must not occur. Also, following the Board meeting. similar instructions were given by the CEO to his senior management team immediately. It also stated "in the event of scrutiny, the company will be judged on vigorous and robust implementation and monitoring - rather than simply establishing policy?. [As explained in part 1 of this ITO, Michael Gunns received a notice of termination of his contract on September 2013. The termlnatlon would be effective thirty days from September 2013.] Conclusion Part1: MegMinerals Potasses Congo SA 150) in 2013, Maglndustrles was facing dif?culties with Its expropriation projects in the ROC. Management decided to invite to Points Nolre Page i 54 ?m .. n. .. 151) 152) 153) 154) 155) 156) for a visit. Three days prior to his visit. Jun Tian advised that the requested 5,000,000 CFA [$10,040 to coordinate all aspects of the connection from the Premier and the Mayor of Points Maine and Kouilou as well as 1,000,000 CFA [$2,008 for per diem payments to his delegation during his visit. was also invited to visit China but Longbo Chen decided to not use a letterhead for the invitation. On May 2nd, 2013, a meeting was held in Points Noire to officially launch the ari?cmmsalo" frth?E'F?FOJect. '3 On May 2013. refused to sign a payment totaling 6,000,000 CFA [$12,048 to Government Of?cials. As a resuit 3 refusal, Shoubing Li and Fuiiang Wang authorized the payment that was made in cash. in July 2013. sent an anonymous e-mell to inform Maglndustries that on May 2013. a payment of 5,000,000 CFA [$10,040 was made to 'a Government Official. He was later met by Michael Gunns In the R00 to investigate the anonymous complaint. . reported to Gunns that he refused to authorize the payment. I believe that Magindustries' head office in Toronto was informed of the bribe. First, the anonymous email sent on July 2013 alerted the company. Then. Geoff Woo, CFO of Maglndustries in Toronto and 'Gunns, a Consultant for Maglndustries in Toronto, traveled to the R00 and both met with -. Gunns discussed with - the illegal payment. i believe that Gunns reported the payment to the Board of Directors and Woo was also in attendance. i believe that the payment made to was made to gain a business advantage for the expropriation work conducted by Magindustries. i have reasonabie groands to believe that a search warrant for the documents and/or data (?Things to search for") and the documents andfor data to be produced would further the investigation and these things would afford evidence of the offences under investigation. Part 2: Eucalyptus Fibre Congo 157) 153) Based on the information set out in this i believe that during their 2012 Audit of Eucalyptus Fibre Congo, EY discovered the existence of a number of unsupported payments. After EY briefed Magindustrtes? audit committee and informed them that the term "black money? was going to be used in the representation letter. Magindustries? management at their Toronto office sought clari?cation about the nature of these payments. Magindustries was issued fines from previous years relating to the Congo tax regulations which they settled by making ?biack money? payments and ?whit money' payments. Page i 55 -. .. - . - Hm..%.uhu .. MH- mm. .. ..-, .. e? 1 59) 160) 161) 162) i believe that the ?black money" payments were bribes made to government employees and the "white money" payments were legitimate payments made to the government. I believe that Geoff Woo, CFO of Magindustrlee In Toronto, was aware of the "black money? payments as well as the spreadsheet that described ways to wash ?black money? (APPENDIX E), as it Was discussed in e-malis. i believe that a total of five ?black money' payments were made by Eucalyptus Fibre Congo for a total of approximately $102,000 CAD. The ?black money? payments, combined with ?white monef? payments totaled $147,000 CAD. i believe Maglndustries bene?tted from these payments by saving approximately $716,935 CAD owed in taxes. i further believe that the total of amounts that should have been paid for the Congo tax regulations was approximately 943,934.64 CAD. i have reasonable grounds to believe that a search warrant for the documents and/or data (?Things to search for") and the document and/or data to be produced will further the investigation and these things will afford evidence of the offences under investigation. SEARCH MRRANT SEARCH WARRANT AT MAGINDUSTRIES LOCATED AT 33 YONGE STREET, SUITE 820, TORONTO, ONTARIO This search warrant is being sought in relation to the following offences: 163) have reasonable grounds to believe that offences contrary to an Act of Parliament have been committed: Between January 2013 and December 2013, by Longbo Chen, Zhongping, Jun Tlan and Fuliang Wang, to wit: i) Brlbing a Foreign Public Official contrary to section 3(1) of the Corruption of Foreign Public Officials Act?, it) Fraud on Magindustries? investors contrary to section 380 of the Criminal Code; Conspiracy to commit an indictable offence contrary to section 465 of the Criminal Code. Between January 2012 and December 2013, unknown employees of Eucalyptus Fibre Congo andior Magindustries, to wit: i) Bribing a Foreign Public Official contrary to section 3(1) of the Corruption of Foreign Public Officials Act-\Kj Page I 56 it) Fraud on Maglndustries? investors contrary to section 380 of the Criminal Code; 164) i also have reasonable grounds to believe that offences pursuant to section 22.2 of the Criminal Code have been committed between January 2012 and December 313?, 2013, by Magindustrlee: Briblng a Foreign Public Of?cial contrary to section 3(1) of the Corruption of Foreign Public Of?cials Act; (d)Fraud on investors contrary to section 380 of the Criminal Code. The ?Things to search for? 165) Should this search warrant be granted, propose that peace officers be authorized to enter the premises at 33 Yonge Street, Suite 620, Toronto, Ontario, to search for and to seize the following documents andior data (?Things to search for"): (3) Documents Include all paper formats, electronic data that can be contained within devices (such as but not limited to mobile devices. external storage devices, computers and hard drives) and Include agreements, financial statements, notes, letters, spreadsheets, flow charts, correspondence, 8- mails and faxes; I) Any documents related to the titie or Job function of Maglndustries', andior its subsidiaries?, employees for the years 2008 unto and including 2014; ll) Any documents for the years 2012 up to and Including 2014 related to Magindustries? expropriation projects In the Republic of Congo; Any documents for the years 2012 up to and including 2014 related to the iv) Any documents for the years 2013 up to and including 2014 related to the planning adior anysubsequent visit 0 organized by Magindustries by v) Any documents related to the payment and/or agreement to pay - I on May 2nd, 2013; ex Magindustries' employee: vi) Any documents rotated to yii)Any documents for the year 2013 related to Maglndustries? internal control policy, reports, guidelines andior procedures; vill)Any documents related to a 30,000,000 CFA payment made by Eucalyptus Fibre Congo on November 2012, regarding a tax inspection: ix) Any documents reiated to a 7.000.000 GFA payment made by Eucalyptus Fibre Congo on July 2012, regarding a tax inepection; x) Any documents rotated to 5,000,000 CFA payment made by Eucalyptus Fibre Congo on December 2012, regarding social secure inspection: Page I 5? mamww w-m - .-.. aim-va cunt-wands A *?hu?i xi) Any documents related to a 3.000.000 CFA payment made by Eucalyptus Fibre Congo on July 2012, regarding commerce administration inspection; xii) Any documents related to a 6.000.000 CFA payment made by Eucalyptus Fibre Congo In 2013 regarding taxable staff bene?ts. The documents andlor data exist and are at 33 Yonge Street, Suite 820, Toronto, Ontario 168) i believe the above noted things in sub-paragraph to (xi) are each associated 167) to Magindustries and the offences under investigation. i believe that the events described in the grounds to believe led to documents being created by Maglhdustrles employees to allow them to continue the development of their potash mine and the wood chip business in the Republic of Congo. I believe that the head office of a publicly traded Canadian company keeps documents detailing the title and the job function of its employees. I also believe that it is reasonable to search documents up to December 31?, 2014, since the expropriation project is ongoing. i believe that the communication between the Government Public Of?cials and Maglnduslries is ongoing. It is reasonable to believe that these documents which are collected In paper and electronic format are at the head office and place of business of Magindustries located at 33 Yonge Street, Suite 820, in Toronto. Ontario. i read a report prepared by Constable Daniel Chang (Cst. Cheng), a peace officer and member of the RCMP in Toronto. i learned that on October 2014, Get. Chang attended 33 Yonge Street, Suite 820, Toronto. Ontario and saw a sign indicating ?Magindustries Corp? upon exiting the elevator on ?the 8th floor. He also located suite 820 on the frosted glass door indicating ?Maglndustrles? and the door was looked. The documents andlor data at 33 Yonge Street, Suite 820. Toronto, Ontario will afford evidence 168) Any documents related to the title or job function of Magtndustries. and/or its 169) 170) Any documents for the years 2012 to 2014 related to the subsidieries?. employees for the years 2008 to 2014 will afford evidence with respect to the commission of the offence by understanding the structure of the company and the role of certalnindividuals. Any documents for the years 2012 to 2034 related to Maglndustries' expropriation projects in the Republic of Congo will afford evidence with respect to the commission of the offence in relation to the expropriation project. Page I 58 . ?Hum-L .. Inna-mum.? .. 171) 172) 173) 174) 175) 17s) 17?) 178) 179) Any documents in relation to . ex Maglndustries? employee will afford evidence with respect to thelcommission of the offence as to how Maglndustries dealt with him and the reasons behind his training in Toronto and the abolition of his position. Any documents for the year 2013 rotated to MaglnduStries? internal conirot policy, reports, guidelines and/or procedures wilt afford evidence with respect to the commission of the offence in understanding the practices at Magindustrles and obtaining any reports made regarding the payments under investigation. Any documents in relation to a 30,000,000 CFA payment made by Eucalyptus Fibre Congo on November 2012, regarding a tax inspection will afford evidence with respect to the commission of the offence and will provide a full picture regarding the payment, how Magindustries dealt with it, confirm which individuals authorized the payments and who was paid. Any documents in relation to a 7,000,000 CFA payment made by EuGaiyptus Fibre Congo on July 18th, 2012, regarding a tax inspection will afford evidence with respect to the commission of the offence and will provide a full picture regarding the payments, how Magindustries dealt with It, con?rm which individuals authorized the payments and who was paid. Any documents in relation to a 5,000,000 CFA payment made by Eucalyptus Fibre Congo on December 2012, regarding sociat secure inspection will afford evidence with respect to the commission of the offence and wilt provide a full picture regarding the payments, how iviaglndustries deait with it, confirm which individuals authorized the payments and who was paid. Any documents rotated to a 3,000,000 CFA payment made by Eucalyptus Fibre Congo on July 2012, regarding commerce administration inspection provide a full picture regarding the payments, how Maglndustries dealt with It. confirm which individuals authorized the payments and who was paid. Any documents in relation to a 6,000,000 CFA payment made by Eucalyptus Fibre Congo in 2013 regarding a taxable staff bene?t will afford evidence with respect to the commission of the offence and will provide a full picture regarding the payments, how Maglndustries dealt with it, confine which individuals. authorized the payments and who was paid. Page i 59 Ava-.- 130) 181) 182) 183) 184) rSres Furthermore, i believe that some of the'documents ahdlor data (?Things to search for?) will be contained in computers, electronic devices as well as electronic messages. It is reasonable to believe that some documents have been created or kept on a computer. The majority of individuals working in a business environment use computers at work. it is also reasonable to believe that documents could have been created and exchanged via email. For these reasons. I am requesting that the search of computeris) be granted for the to search for?. i believe that analyzing sit the data of a company on site could take an extended amount of time. In order to reduce the impact on the regular business of Magtndustn?es and to avoid an over seizure, investigators will, it feasible, conduct a search of the computeds), serveris), electronic deviceis] or externat storage device(s) on site and only the electronic data believed on reasonable grounds to be. included in the "Things to search for? will be copied andior forensicaliy imaged. if the on?site search is not possible, all of the electronic data contained within the computer(s). server(s), electronic devicets) or external storage deviceis) will be copied andlor forensicaily imaged. As a result, i propose that the electronic data copied from the computeris), server(s), electronic deviceis) or external storage device(s) be acquired on site and reviewed an analyzed at a RCMP facility. spoke to Get. Etienne Dussault, Computer Forensic. investigator of the integrated Technological Crime Unit of the RCMP. National Division, in Ottawa, Ontario and he told me the following: imaging involves making a copy of the data that would be on a computer andlor device. Furthermore, he told me that it is difficult to say how long it would take to image a computer or device until it is examined, but depending on the circumstances, a computer may take two to four business days. However, the quantity of devices and media, size or capacity, the complexity and the physical condition are factors that will affect the amount of time taken to process and forensically image the electronic media or devices; At the scene of a search, he can do a cursory search to determine who the user(s} of the computer is (are). if there are reasonable grounds to believe that information regarding the documents and/or data (?Things to search for?) would be found, the device andlor a forensic image of the device will be seized andtor made; (0) Once imaged, he can fitter tiles based on the format such as, but not limited to audio, video, graphics, word processing, etc; He can fitter ?les based on dates of the documents. However, when he retrieves documents that have been deleted, there may not be a date associated to the ?le and the only way to see the date of the document Is to open it. Page 60 Hm. . - a a. u. mansions conm'nons 185) I propose the following terms and conditions In relation with the computeds), serverts). electronic devicets) or external storage devicets): When reasonable grounds to believe that the things to search for are contained in electronic data within a computer, a server, an electronic device or an external storage device, a copy andfor a forensic image of the electronic data will be made and it not feasible. a copy andlor a forensic image of the device will be made; in the event that it is not practicable to image the electronic data or device on site due to circumstances out of the control of the RCMP, the electronic data or the computer(s). server(s), electronic device(s) or external storage deviceis) seized will be forensicaliy imaged on site (mirror image); to) in the event that it is not practicable to iorensically Image on site, the item may be removed from the search location and the imaging process may take place in an RCMP facility; The search of the electronic data, computer(s), server(s), electronic deviceis) or external storage device(s) will be based on the offences set out in this warrant to identify any of the documents andlor data (?Things to search tor"); The computeris), electronic deviceis) or external storage deviceis) will be returned as soon as practicable. 186) i also propose that the documents and/or data to be seized will be examined and analyzed subject to and in accordance with the following terms and conditions: The examination and analysis to search for the evidence described in paragraph 165(a)i) to xii) will be conducted on all the documents andror data, EXCLUDING documents and/or data identified as potentially privileged. In order to Identify the relevant documents and/or data, all the documents andlor data (EXCLUDING documents and/or data identi?ed as potentially privileged) may be examined and searched regardless of the. form In which the documents andlor data is stored. When investigators reasonably believe that a document andior data was either received or sent by a solicitor. or Investigators reasonably believe a document and/or data is subject to the solicitor client privilege, the Investigator will cease reviewing the document andlor data and will limit its access after which time no- person shall access these decumenis except as authorized by court order. QRDER 187) i believe that the assistance of the Forensic Accountant Management Group from Public Works and Government Services Canada may be required to assist the peace officers with the search as financial information is sought and they will provide assistance with their experience. I therefore propose that pursuant to section 487.02 of the Criminal Code, an assistance order be issued ordering the M) . Page 61 Int-"183) 189) Forensic Accountant Management Group and any other person to provide such assistance as it is necessary to give effect to the search warrant. i believe that the assistance of a certified RCMP translator may be required to assist peace of?cers with the search as some documents andlor data may be written in Chinese. The translator would provide assistanca to determine the content of the document andlor data If written in Chinese. therefore propose that pursuant to section 487.02 of the Criminal Code, an assistance order be issued ordering the certified RCMP translator to provide such assistance as it is necessary to give effect to the search warrant. i belieye that the assistance of any person employed by or contracted by Maglndostries may be needed to assist the peace officers with the search. Paper format documents can be ?led in a complex manner in a business. Their assistance may be necessary to help investigators and to show them where their documents are kept. Also, computer networks and related systems can be very complicated and their structures vary from one environment to another. Their assistance may be necessary to provide information about the systems, location of data related to this authorization. how to access the systems or to provide user or administrative credentiais to access computer systems or network. i believe that Magindustries empioyees' assistance will be required to give effect to this authorization. i therefore propose that pursuant to section 487.02 of the Criminal Code. an assistance order be issued ordering the Maglndustrles? employees and any other person to provide such assistance as it is necessary to give effect to the search warrant. PRODUCTION ORDER PRODUCTION ORDER FOR TRENT HENRY. CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF ERNST YOUNG This production order is being sought in relation to the following offences: 190) 191) i also have reasonabie grounds to believe that behveen January 2012 and December 315?. 2M3. unknown employees of Eucaiyptus Fibre Congo andior Maglndustrtes have committed the following offences: Bribing a Foreign Public Officiai contrary to section 3(1) of the Corruption of Foreign Public Of?cials Act; Fraud on Magindustriss? investors contrary to section 380 of the Criminal Code; Pursuant to section 22.2 of the Criminal Code, I also have reasonable grounds to believe that between January 15?, 2012, and December 31", 2013, Maglndustrles hays committed the following offences: Bribing a Foreign Public official contrary to section 3(1) of the Corruption of Foreign Public Of?cials act; Fraud on Maglndostries' investors contrary to section 380 of the Criminal Code. Page I 62 The documents andfor the data to be produced 192) 193) I propose that Trent Henry, Chairman and Chief Executive Officer of Ernst Young Canada, or his designate, shall produce documents andl?or data, or copies of them certified by affidavit to be true copies, located at 222 Bay Street. P.0. Box 251, Toronto, Ontario or any other location, off site receptacle or place where Ernst Young maintains and stores the things referred to as documents andlor data to be produced to Constable Anick Marie Mazerciie, or her designate, a peace of?cer of the RCMP, Sensitive and internationai Investigations Section at 155 McArthur Avenue, Room 523, Ottawa, Ontario as soon as reasonably possible but in any event no later than 30 days from the date this order is served. Should this production order be granted. there are reasonable grounds to believe that the foiiowlng documents andior data will afford evidence respecting the commission of the named offences. Documents include alt paper formats. electronic data that can be contained within devices (such as but not iimited to mobiie devices. external storage devices, computers and hard drives) and include agreements, financiai statements, notes, ietters, spreadsheets, flow charts, correspondence, emails and faxes; The documents and/or data, or copies of them certified by affidavit to be true copies to be produced are: i) The 2012 Magindustrtes audit file, including the paper and eiectronic tile. auditor?s notes and e-mails; ii) Any documents related to a 30,000.000 CFA payment made by Eucalyptus Fibre Congo on November 30th, 2012, regarding a tax inspection; - Any documents related to 3 7,000,000 CFA payment made by Eucalyptus Fibre Congo on July 2012. regarding a tax inspection; iv) Any documents related to a 5,000,000 CFA payment made by Eucalyptus Fibre Congo on December 2012. regarding sociai secure inspection: v) Any documents related to a 3,000,000 CFA payment made by Eucalyptus Fibre Congo on July 2012, regarding commerce administration inspection; vi) Any documents related to a 6,000,000 CFA payment made by Eucalyptus Fibre Congo in 2013 regarding taxable staff benefit. The documents andior the data are In the possession of Ernst 8. Young and their CEO Trent Henry 194) i believe that documents and/or data in relation to Maglndustnes are In possession of Ernst a Young. As explained in this ITO, EY Is the auditing firm for Magindustries and Ashraf Zineldin is the person responsible for the audit for EY. As stated senior in this Ashraf Zineidin provided his work address in an email as EY Tower, 222 Bay Street, PD. Box 251, Toronto, Untamed/Q Page i 63 195) i believe that throughout their audit, EY employees have collected and produced documents which are collected in paper and electronic format. It is reasonable to believe that these documents andlor data are in possession of Ernst ti Young. 196) I spoke to Patricia Odlerna and i learned that the audit procedures and the evidence obtained must be documented as per the Canadian Auditing Standards. i believe that these documents andior data are In possession of Ernst ti Young, 197) I accessed the EY website at wvwv.ey.com and teamed that Trent Henry is the Chairman and CEO of the company EY in Canada. As the CEO of the company. 3 believe that Trent Henry has the possession or the control of the documents and/ordata. The documents andior the date to be produced will afford evidence 193) The 2012 Maglndustries audit ?le. including the paper and electronic file, auditor?s notes and e-mails will afford evidence with respect to the commission of the offence and will provide a full picture concerning their audit procedures. the . information obtained while they conducted the audit, their assessment of the risks of material misstatements and their representation letter. Furthermore, any documents in relation to the payments listed in paragraph 193 will afford evidence with respect to the commission of the offence and will provide a full picture regarding the payments, how Maglndustries dealt with it, confirm which individuals authorized the payments and who was paid. TERMS AND CONDITIONS 199) I propose the following terms and conditions in relation with the documents endlor data to be produced: Trent Henry. or his designate, shall not destroy or alter any original documents andlor data copied or duplicated and produced unless permitted by order of a Court of competent jurisdiction or until advised by Constable Antck Marie Mazeroile or a peace officer acting under the authority-or direction of that peace officer, that the investigation of the offences is concluded and that any charges resulting have been dispOSed of including all appeals; Trent Henry. or his designate. may produce any documents andlor data by electronic transmission to the electronic email address at or can contact Constable Anick Marie Mazerolle at to make arrangements for the deliven/ of documents andlor date; (0) Trent Henry, or his designate, and any employee shall not directly or Indirectly disclose or permit disclosure of the content and existence of this order, in any manner, or to any person except as may be necessary for the purposes of compliance with its terms or obtaining the advice or assistance of legal counsel unless otherwise ordered by a Court of competent Jurisdiction: Nothing in this order shall require the production of any documents andior data which is subject to solicitor client privilegegg Page I 54 .. .. V. 200) SE 201) 202) 203) 204) Copies of any documents andlor data produced pursuant to this order need not to be returned to Ernst Young. Trent Henry and/or Ernst a Young are not under investigation for the offences mentioned in paragraphs 190 and 191. ORDER i am also seeking that all documents relating to this application. any resulting search warrant and production order and any report to a Justice in respect of the things seized be placed in a packet and sealed immediately on determination of this application, and that packet shall be kept in the custody of the court in a place to which the public has no access and shall not be dealt with except in accordance with section 487.3 (4) of the Criminal Code. if the content of this application was made public before its execution and Maglndustrles was made aware, It would compromise the extent of this ongoing investigation as evidence could be destroyed at the office of Maglndustries. At this point. It is unknown how Maglndustries' employees wilt react and if some of them will agree to provide a statement. Should this application be made available to the public before any interviews, it would greatiy affect the evidence to be obtained during those interviews as the interviewee could be aware of the information gathered thus far. i believe that if the content of this application was to become public, Magtndustries share price could be negatively affected which would prejudice the interests of innocent persons owning this stock. SWORN BEFORE ME AT the city of Commissioner of Oaths. etc. Ottawa in the Province of Ontario, This 9? day of January, 2015 Cat. Anlck Mazeroila (affiant) Page 65 . . .. t?n?Hu APPENDICES Page i 66 APPENDIX A . . . .. 1.5.11.1: 121.13.]. I: .. 1:1.11 allivlathtl? . . . . ?av ?uni-?1 3 c; 01234113031332?me sun DEFENSE GM?m-dnmuis 3? 99mm m? 73 Af??nt'cgtif?quest Form . - I 4 I, Demandeur {ng?hdt? aka. WM I. D?puttemcnt{Depattmenl} [$9.113 .- 122,5} QM. Afghan; 14-67% - DEM hm i Cnnseme (Reason) Montank I I a . lekhes I. ?97 Approuv? par (Approved by): Chef de D?pl. (Dept. Head) (2102 mm wnwow augotuoq np .Lasaagpuod seam; 05U?3w 9p assuwd tap .Lai'J69 APPENDIX silililvlJ? 1.5.1.. .. . xi :lJl.i.l..l.ll..r :l .. i. niluir 31:15. .. .u . Frais pour- Ia D?l?ga'rion du Minisf?re des Affaires Fonc .. . i?res 31' du Domaine Public I (Poin'l'e?Noir'e, I2 2 mai 2012) Duns 1.6, but? insTaHaTion officiefle. de 1c: commission 'exgropria?on'pour le. Projef de Pb?msse d8 Mango Na. lNom a? Pr?nom Monfani? I . Stgnafur'iMmIsTr'e Pierre MABIALAilsouver-am're 5 $300,000 2 EiD?f?ga'I'ion mm.- i I . Efrar?s de mission forf?ai?f' 1 1TOTAL . mun-Im?i??ww . :1 APPENDIX .. .: .. . . .. .. . .. Wk mega ,?f?gx Gt fizz x12: LET: {?er Hi? {Etezllil? I 3.21328 - Congo sh I ELF. 1128 Points-moire R?g?u Con at: DE 503715 ENTREE DE CAISSE MO HF DE LA at? BENEFICIAIRE Hm mournm En 53.. AG MINERALS ump?'r par fa den-IA no??uj 1::Actual I 131? A kit) I I I Solde Montant?udger?? I Visa B?g??claire - Code Budg?taim Compres a lmpufer W58 09:55:; Visa Chef ?ammable - W33 QAF wsa can ca 60 Fm.? mw?w.? wan-5- yuwrunr?n-d-?_ .- 1 . . APPENDIX . . . . y. I: .. CANADA In the matter of an Application for a Search Warrant, pursuant to section 487. an Assistance PROVINCE OF ONTARIO iOrder, pursuant to Section 487.02, and a Sealing Order pursuant to section 487.3 of the Cn'minal EAST REGION )Code. I SEARCH WARRANT AND RELATED ORDERS TO: PEACE OFFICERS: UPON BEING SATISFIED, based on the information on ceth in writing, dated July 523 2014, of Constable Aniok Marie Mazerolle, a peace officer and member of the Royal Canadian Mounted Police of the City of Ottawa. in the Province of Ontario, that there are reasonable grounds to believe that one or more offences contrary to an Act of Parliament have been committed, to wit: Bribing a foreign public of?cial, contrary to section 3 of the Corruption of Foreign Public Act; Conspiracy to commit an indictable offence, contrary to section 465 of the Criminal Code. AND UPON SATISFIED THAT there are reasonable grounds to believe that the foilowing things will afford evidence with respect to the commission of the said offences: The hard drive containing data that was seized at Radiant Communications on March 2014. AND UPON BEING SATISFIED THAT there are reasonable grounds to believe that the said computer hard drive described above is at the following piece: 155 McArthur Avenue, Ottawa. Ontario. 0R4. AND UPON BEING SATISFIED THAT the provisions of sections 48?, 487.02, and 487.3 of the Criminal Code have been met; iT IS ORDERED THAT: OFFENCES 1. The offences for which there are reasonable grounds to believe has been committed are: - Bribing a foreign public officiai. contrary to section 3 of the Corruption of Foreign Public Of?cialAcf; and Conspiracy to commit an indictable offence; contrary to section 465 of the Criminal Code. Page . .ueww-wn - . SEARCH WARRANT 2. Peace officers are hereby authorized, between the hours of 6:00 AM and 6:00 PM on the 24?? day of July, 2014, to enter the premises at 155 McArthur Avenue, Ottawa, Ontario, K1A 0R4 (the ?premises"), to search for and to seize the hard drive containing data seized at Radiant Communications on March 2014 (the ?hard drive" for which there are reasonable grounds to believe the following evidence relating to the offences in paragraph 1 will be obtained: Any e-mails or electronic communications, including sent, meant and deleted communications and their associated attachments belonging to Maglndusiries. related to black money payments made by Eucalyptus Fibre Congo. Any e-malls or electronic communications, including sent, unsent and deleted communications and their associated attachments belonging to Maglndustries, related to Ernst Young. (0) BUT NOT any e?mails or electronic communications, including sent, unsent and deleted communications and their associated attachments belonging. to Maglndustries. that has been previously or will be identified as potentially privileged. OTHER TERMS AND CONDITIONS 3. The hard drive to be Seized will be examined and anatyzed subject to and in accordance with the following terms and conditions: The examination and analysis to search for the evidence described in paragraphs 2(a) and 20;) will be conducted on all the data contained on the hard drive, EXCLUDING the data identi?ed as potentially privileged. I(b)ln order to identify the relevant data, all the data (EXCLUDING the data identified as potentially privileged) may be examined and searched regardless of the form in which the data is stored. to) When investigators reasonably believe that a document was either received or sent by a solicitor, or investigators reasonably believe a document is subject to the solicitor client privilege. the investigator will cease reviewing the document and will limit its access after which time no person shall access these documents except as authorized by court order. ASSISTANCE ORDER 4. IT is FURTHER ORDERED THAT, pursuant to section 487.02 of the Criminal Code, any person, including Stephahie Kenny, shall provide such assistance as is necessary to give effect to this search warrant, Furthermore, any persons. including Radiant Communications and its employees shall not directly or indirectly disclose or permit disclosure of the content, existence or operation of this search warrant in any manner, or to any person, except as may be necessary for the purposes of compliance with the terms of this search warrant or to obtain legal advice. Page I 2 SEALING ORDER 5. IS FURTHER ORDERED THAT, pursuant to section 487.3 of the Criminal Code, at! documents relating to this appiication and any resulting search warrant and any report to a justice in respect of the things seized, shaii be placed in a packet and sealed immediately on determination of this application, and that packet shat} be kept In the custody of the court in a place to which the public has no access and sheil not be dealt with except in accordance with section 487.3 (4) of the Criminal Code. DATED at the City of Ottawa. in the Province of Ontario. on July 33 2014. aeL, a (Q) A Justice of the Peace in and for the Province of Ontario it? Page I 3 me?mun mu . . Mann-w- vw.-W_ run?V; ?av- .Mm my l-n. ma .-.-. m? 0 av- n? -- a AP ENDIX 1.. I it . I. .3113. .113. a. . .. xii.- Rs?. .. 52*} LEV: I .. .. .. . W?imm?l" --. awn-um-avmu- Dunno.? trim; Catamaran ?ramble Wu v: .m - ,1 gum.? {taxes mannered] Taxable Base Pension Funds Unique Tum ludiudua' Payml] [Imam 2,024,000 491,427 132,065; season . - Tuition .- Water 1.993.850 435.311 97.343! 799 1202.443 1.7433544 #373970 Liquid 633 277,300 67,328 13,054 110,920 Security 3.120.000 757,536 46,500 1243M Meal Allowance 35mm . 8,590,350 2,303,575 14,152,800 metiremam: Compensation 3.735.300 919.071 56.?80 1,514.13] Subsidies Bonuses 1,940.0? ?71.05 29.16; 775.03 Daily ?ladders 33.030325. 9.233.905 570.4611 3.212 93,760,921 12,355,152: 3,697,793; 3? in mum: total amount that should bein forth: above tmhlesm?bene?: Items 15 In reality. a meal amount of 17 CPA was paid {6 mitllon under-?Ie-tahle 11 million above-bum}, in total cost saving of46 CPA. ..-. r' Chinese mpmes. . 3. .. 2) mam uarwQOeuthe-tabl? mm The third mm EFC 3] Emerge-en set: up a consulting unmpany in Panic-Rain.- to Wed such transactions. xii?? 63.96? 318 CFA 1} Fame Department should have Zsetsof bookmark furgavemrnent Inspection and ?ne for manual use. Main ?nance and HR positions must be male-d by aw-wmw ., wv;m.q.. ..