RE:Globe & Mail This story is riddled with misinformation and serious errors and omissions. Policyholders (both mutual and non-mutual) were treated shabbily and intend to launch a class action against Definity seeking several hundreds of millions in damages. This time consuming and challenging process is underway.
How were directors and officers allowed to acquire 662,062 shares from the IPO in direct violation of the regulations with no action taken by OSFI? Question neither asked nor answered in the article.
Who benefits from the valuation being grossly understated? Certainly not the policyholders whose benefits were determined by the valuation. The directors, officers,investment bankers, HOOPP and Swiss-Re made out like bandits while policyholders were denied the benefits they negotiated in good faith
Mutual policyholders were denied more than 7 million undervalued shares costing them more than $132 million. The company sold approximately 116 million shares and was authorized to issue an unlimited number of shares and yet didn't respect the requests of mutual policyholders. Why you might ask? The journalist certainly didn't ask this question but a lawyer will when this goes to court.
Life insurance companies issued shares to all policyholders when they demutualized a couple of decades ago. If Definity policyholders had been issued shares instead of cash they would have accrued gains exceeding a staggering $1.8 BILLION! This issue wasn't raised in this article but will find its way into future litigation to be sure.
Policyholders who number more than 630,000 will begin to understand how "Join in Our Future" was a clever marketing scheme to cover up the underlying animus of the Board towards policyholders and especially mutuals, who forced demutualization to happen.
Mailing out cheques before Christmas 2021 for simply owning an insurance policy deflected serious scrutiny of Canada's 2nd largest IPO and first demutualization of a P&C insurance company. Closer scrutiny will reveal the deception, manipulation and failures of board governance and federal regulators. There's far more to this story than revealed in this shoddy effort. Stay tuned.