The Gazette from Montreal, Quebec, Canada • 11

lMjL lU. nnznsmzzi ME TSE I THEY i i- CLOSED 1 I 1 1845.42 3540.74 UP 4.71 DOWN 1.18 DOW GOLD DOLLAR $367.70 88.76 UP 18.82 UP $0.40 DOWN 0.03 Toronto stocks limp along Stocks prices in Toronto suffered through another lacklustre session yesterday and closed little changed. In New York, blue-chip stocks recovered some of last week's losses with a late rebound, while the rest of the market settled for a mixed showing. 'PAGE D10 Surplus of ferrochrome blamed for scrapping Becancour project PENNY MacRAE CANADIAN PRESS were Mitwui and Co. (Canada) Showa Denko Metals (Canada) Caemi Canada Inc.

and the Societe Generate de Financement du Quebec, the Quebec government holding company. Most ferrochrome production is carried out in South Africa. The announcement yesterday came as backers for a far larger project, an aluminum smelter under construction near Sept. lies, met at a Montreal hotel to consider its fate. Worried by spiralling costs and construction delays, the members of the international consortium made up of European and Japanese metal companies have been considering cancelling con struction of the Alouette smeltery; Unforseen problems, such a large clay deposits, have added more than $200 million to the projected cost of $1.3 billion.

Charles Perrault, chairman of the Aluminerie Alouette has saig! that costs could be cut by scaling down the smelter plans and switching- ome equipment orders to lower-cost suppliers. There has also been speculation that some partners might be withdraw and be replaced by new investors. 4 Sept lies municipal leaders have said that plant is vital to the future of Quebec's struggling North Shore. The plant was expected to create 100 full-time jobs and 200 to 300 indirect jobs, said Ouimet. Ouimet said that a million tonnes of capacity are expected to be added to worldwide ferrochrome production by 1992 and "this will contribute to a significant surplus." "Difficult pricing conditions" are expected to continue for another five years, added Ouimet.

He said a number of ferrochrome projects elsewhere had not been confirmed when the consortium announced the project in Becancour, the site of many projects attracted by Quebec's cheap hydro-electric power. The partners involved in the project Proposal made on farm trade DR0M0LAND CASTLE, Ireland Ray MacSharry, the European Community farm commissioner, made a surprise proposal to break almost four years of deadlock in world farm-trade talks, challenging trade partners to cut subsidies to farmers by 30 per cent be-j tween 1986 and 1996. PAGE D8 Don't call him Trump A world glut of an alloy used in production of stainless steel has led a consortium to scrap plans to build a 1 50-million plant in Becancour. "The partners have been working on reducing capital costs and after six months of attempts, we had to make a decision and the decision was said Guy Ouimet, president of Ferrochrome Canada Inc. "The project has been suspended indefinitely," Ouimet said.

The plan to build a plant for production of ferrochrome was announced last May. I wc i PARIS Don't call Bernard Ta-pie (left) the Donald Trump of France. Tapie is indeed wealthy, publicity hungry and unashamedly ambitious. But Trump, said Tapie, "is everything I loathed most. the embodiment of cynicism and bad taste." PAGE D8 Campeau offers shareholders his sympathy! ROB CARRICK CANADIAN PRESS -is4i i''.

1''- ml 111 i Li "-IV 2 isf j'f Varity defends move to U.S. TORONTO Varity Corp. doesn't owe a thing to Canada, even though the company has received mil-; lions of dollars in aid from the federal and Ontario governments, company chairman Victor Rice said. He 1 defended the decision to move Varity's headquarters to the U.S.saying the two governments have more than recovered the money they pumped into Varity's predecessor, Massey-Ferguson. TORONTO An apologetic feat still defiant Robert Campeau has offered his sympathy to shareholders of Carrtpeau the debt-choked real-estat6 and retailing empire that became a symbol of corporate folly.

"As you are aware, we've had tre mendous dithculties over the past nine months," Campeau, his face grim and his voice booming, told the annual meeting yesterday. "This is all reflected in the market. Our ordinary shares are now trading at less than 10 percent of what they were last year "I truly sympa Campeau At annual rqeeting GAZETTE, ALLEN MclNNIS Cabano Expeditex president Arthur Servant says truckers across Canada have seen revenues drop abano Expeditex buys Clarke Transport SHEILA McGOVERN THE GAZETTE Court approves spinoff TORONTO Hudson's Bay Co. said the Supreme Court of Ontario has approved a plan under which shares of the company's Markborough Properties Inc. will be distributed to Hudson's Bay's common share-': holders.

The company said the Markborough shares are expected to begin trading on the Toronto and -Montreal stock exchanges on Aug. 8. This year, the court blocked a similar proposal by Canadian Pacific which had planned to distribute 80 per cent of Marathon Realty to common sharehold-; ers. The court said the plan would have cheated CP preferred shareholders in their claims to dividends and proceeds in the event of Bank lowers mortgage rates Bank of Montreal has reduced its long-term mort-" gage rates. The new rates are: three-year rate, 14 per cent, down a quarter of a percentage point; four, five and seven-year rates are all 13.75 per cent, down a half a point.

Time off for forest operations MacMillan Bloedel Ltd. of Vancouver and Canadian Pacific Forest Products Ltd. of Montreal announced the temporary shutdown of some operations. MacMillan is closing two Vancouver Island sawmills for two weeks starting Aug. 20 because of poor market condi thize with all of you who have incurred losses.

As you know, my family and I have also had tremendous losses Believe me, I know how you Since late last year, when staggfering debts forced his two U.S. retailing companies to seek protection bankruptcy law, the business world has waited for Campeau to speak. 1 In his speech, he quickly veered from condolences to shareholders to- a defence of his 1 0.3-billion takeovertf the Allied and Federated retail conglomerates, Market conditions were good at the time and all the best advice from investment brokers and bankers indicated the deal made sense, Campeau saidS "The deal certainly did not turrj out the way we had hoped it he said. Loaded down by debt incurrecjln the PLEASE SEE CAMPEAU, PAGE 09 1-1 trucking industry in recent years has led to stiff competition and low profits. Servant said the 28 major truckers across Canada have seen revenues drop 8.8 per cent.

Rationalizing operations is one way of dealing with the problem, he said. For Cabano the acquisition also signals that the firm is well down the road to recovery. Eighteen months ago the company had to undergo a financial restructuring to stave off creditors, and in 1989 reported a loss of 1 6 million. However, during its last fiscal year ended April 28, Cabano reported a profit of $4 million. the operations and assets of a number of Quebec-based companies including Clarke Transport Routier, Norway Transport, Chicoutimi Transport, Cho Bo and Beauce Express.

To pay for the dear, Cabano will issue 1.5 million shares of Cabano Expeditex to Newfoundland Capital the parent company of Clarke Transport. That, will give Newfoundland Capital about 1 1 per cent of Ca-bano's shares. As a result of the acquisition, Cabano has assumed a long-term debt of $6.7 million and acquired assets worth $8.5 million. The government's deregulation of the Cabano Expeditex Quebec's largest trucking firm, is growing even larger with the acquisition of Clarke Transport Routier general freight operations. Cabano Expeditex, which already has 2,100 employees and 3,200 trucks, vans and trailers, will be picking up another 300 to 400 employees and 610 units of rolling stock along with the Beauce Express Terminal at St.

Georges de Beauce. Arthur Servant, president of Cabano Expeditex, said the acquisition involves tions. CP Forest will close the Gold River, B.C., pulp QSC clamps down on seller of real-estate partnerships mill from Aug. 4: to Sept. 4 because of high inventories.

Fujitsu to buy computer firm CRAIG T00MEY THE GAZETTE TOKYO Fujitsu Japan's leading computer manufacturer, has agreed to pay $1.2 billion U.S for Britain's top computer maker, International Computers Ltd. The ded that Masse "seriously contravened the standards of honesty required (of a broker) to protect investors." ri The QSC ruling forbids Masse et Associes from selling any more iijflited partnerships but Normand Masse jcon-tinues to manage all seven real-estate projects. A QSC official said twrjlegal proceedings have been launched against Masse Masse, a former school principal; who has been selling limited partnerships for six years, said he was surprised by the severity of the QSC's sanction. Mass6 attributed his hassles with the QSC to accounting problems and insisted he acted only in the best interests of investors. "People have always'made money with me, always," he said.

The QSC said all are in financial difficulty although Masse" challenged this. The QSC said that Normand Masse, the only shareholder of Masse" et Associes, borrowed a total of $441,91 5 from the partnerships through his management company. He advanced the money interest-free to two other projects he managed, including Cavalier 1 limited partnership, which buys jumping horses in Europe. Massd borrowed the money in violation of promises he made to investors in his partnership contracts, and without their prior permission, the QSC said. "By diverting these sums for his own advantage.

Masse" flagrantly abused the confidence of investors," the QSC said in its toughly worded ruling. It ad deals, said the money will be repaid and the commission's ruling appealed. The QSC's decision comes only a few months after commission chairman Paul Fortugno promised tough action to clean up Quebec's scandal-plagued real-estate partnership industry. In a limited partnership deal, investors buy units of a partnership which invests in the development or management of real estate while offering them tax breaks. Some 2,34 1 investors purchased $35.5 million worth of units in the seven partnerships sold by Mass6 et Associes.

The money was used to help buy residential and commercial real estate for $90.5 million in the Montreal area, Alma and Ste. Julie. buyout will make Fujitsu the sec Quebec's largest broker of real-estate limited partnerships has been stripped of its license by the Quebec Securities Commission for taking out frequent, unauthorized loans from real-estate partnerships it sold to the public. The QSC said Laval-based N. Masse" et Assoctes borrowed $863,303 from seven real-estate partnerships since 1988 while its own losses were rising.

None of the money has been repaid and Masse" et Assoctes is in dire financial straits, the QSC said in a ruling. However, Normand Masse the broker's owner who personally acted as promoter and manager of the partnership ond-largest computer group in the world after IBM, Fujitsu president Tadashi Sekizawa (left) said at news conference announcing the move. Analysts have noted the purchase would give Fujitsu a major sales and manufacturing foothold in Europe ahead of the creation of the single European market in 1992. irokerage industry needs to do more to attract the individual investor PETER HADEKEL so skeptical of the market. The first was the of 1987, which was exacerbated by computerized; program trading done by the brokers themselves.

But even after the market recovered, the individual investor was being slowly frozen out of opportunities to buy new stock issues. Many companies who issue stock prefer to do so in "bought deals" by which an underwriting group immediately agrees to purchase all or most of the stock at a set price, then sells it off to big institutional buyers. I Just a few years ago, companies dutifully jrottcd out their pitchmen across the country in "dog-and-pony" shows designed to whet the appetites of individual buyers. But now, new stock issues are sold off before the individual investor even has a chance to check them out. No wonder the retail customer has lost interest in the market.

Whether something like the Distinction Program is going to have much of an impact on public investing habits is extremely doubtful. The brokerage industry is going to have to do something more fundamental than a beauty contest tjo bring the little guy back to the market. The IDA believes that after years of maintaining a reasonably low profile, it's time to start waving the flag, especially since the lines are now blurring between brokers, banks, insurance companies and other providers of financial services. Times are tough out there in the retail market. Individual investors have been sitting on their hands for the last couple of years and retail brokers are making a lot of cold calls as they scrounge for customers.

Recent statistics indicate that individuals accounted for only 15 per cent of the trades made on Canadian exchanges in the third quarter of last year. The rest of the activity came from big institutional players such as pension plans and life-insurance companies, or from brokers trading for their own account. When they do play the market, individuals are more likely to do so by investing in mutual funds than by opening an account with a stockbroker. A local broker lamented recently that even when he finds someone willing to put $25,000 into the market, the client will often be extremely impatient for quick results and will be tempted to get out at the first sign of weakness in the stock. There arc several reasons why the public has become Elaine Phcnix spends most of her time on the phone making deals.

As senior vice-president and director of Levcsque Beaubien Geoffrion Phenix runs the syndication department, where she lines up buyers for new issues of stock and corporate bonds. But the hard-working executive has an additional challenge these days: trying to restore public confidence in Canada's stock brokers. Phcnix is responsible for something called the Distinction Program, a new idea dreamed up by the Investment Dealers Association of Canada (IDA) to boost public confidence in the brokerage industry. The program is like a beauty contest for stockbro-, kcrs, minus the swimsuit competition. Each district of the IDA will select one finalist who will compete for a national "distinction" award recognizing the finest retail sales representative in the land.

The candidates will be judged on client service, cx-perience, community involvement, investment knowledge and performance. After a year-long selection process, the winner will be announced at the IDA's big bash next June in Whistler, B.C. Why, you might ask, are Canada's stockbrokers will- ing to strut their stuff in front of a jury? "After the 1987 stock-market crash," says Ph5nix, "our industry received some bad publicity. We needed a tool to explain where we're coming from. "It's time we publicized that there are good people out there." The investment industry in North America has suffered numerous black eyes from the insider-trading scandals on Wall St.

to the collapse of Canadian brokerage firm Osier Inc..