Police probe Crocus Investment Fund

The RCMP has begun an investigation of Manitoba's Crocus Investment Fund.

After completing a review of the provincial auditor general's report on the labour-sponsored fund, an independent prosecutor from Ontario, hired by the Manitoba government, recommended that the matter be referred to police for a criminal investigation.

Crocus stopped trading on Dec. 10, 2004 over concerns about the true value of its shares. In April, the fund dropped the value of its shares to just below $7, almost a third less than their value when trading was halted. The devaluation amounts to a $46-million decrease in the fund's net asset value.

On Monday, the fund's board of directors announced that Crocus will not resume trading and will consider selling off assets or merging with other labour-sponsored funds in an attempt to recoup as much as possible for the fund's 34,000 shareholders.

• RELATED STORY: Crocus considers offers from other funds

The board has hired Deloitte and Touche to examine offers from other funds. Already, several companies have said they're interested in the fund's portfolio, including Jovian Capital, with its head office in Winnipeg, and the Ensis Growth Fund, Manitoba's other labour-sponsored fund.

The Crocus Investors Association has raised the possibility of a class action lawsuit.