Extrusion giant Royal Group Technologies Ltd. of Toronto retreated behind a cloak of silence last week after the Toronto Stock Exchange and New York Stock Exchange halted trading in the firm's shares.
TSE watchdog agency Market Regulation Services stopped trading in Royal Group shares Oct. 13 to allow the company an opportunity to issue a news release. As of midday Oct. 15, trading had not resumed and the company had not issued any announcement.
Royal Group is being investigated by the Royal Canadian Mounted Police, the Ontario Securities Commission and Canada Customs Revenue Agency. The investigations focus on transactions Royal Group made with a luxury resort on the Caribbean island of St. Kitts, and on disclosure records, financial affairs and share trading. Royal first disclosed the investigations in late February.
Market Regulation Services spokesman Douglas Maybee said his agency became aware that Royal had material information that would be important to investors. The agency imposed the trading halt when Royal did not issue a news release containing the information.
Maybee said Royal Group's delay in issuing a news release is ``extraordinary.'' Usually a company takes an hour or less to issue a release when its stock trading is stopped. He would not disclose the nature of the information Royal Group was withholding.
Stock analysts interviewed for this story expressed frustration with Royal Group's secrecy and said it was hard to form an opinion on the company in such an environment. None, however, wanted to be quoted for the record.
Royal Group was involved in a hearing on search warrants in Ontario Provincial Court, according to Maybee. The hearing began Oct. 14 and resumed the morning of Oct. 15.
Royal Group shares traded at C$11.28 (US$8.98 ), up 8 cents, when trading stopped Oct. 13.
North America's largest plastic extrusion company reported third-quarter sales of C$555 million (US$441.8 million ) and net profit of C$35.5 million (US$28.3 million).