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TORONTO – It is the end of an era at Pinetree Capital Ltd.
The investment and merchant bank, which was a world leader in financing junior resource firms, announced this week that controversial chairman and chief executive Sheldon Inwentash is resigning after more than 22 years at the helm of the company. His departure is tied to a proposed deal with creditors that gives them security over the firm’s assets, but keeps Toronto-based Pinetree afloat after it defaulted on a debt covenant. The stock, which peaked at more than $15 in 2007, is now worth 7.5¢.
It is a disappointing outcome for Mr. Inwentash. He was on top of the world during the commodity bull market, making an enormous personal fortune as his firm helped hundreds of start-up mining companies get off the ground. His name also adorns the University of Toronto’s faculty of social work, to which he and his wife donated $15-million.
When micro-cap junior miners went looking for capital on Bay Street, Mr. Inwentash was, along with Ned Goodman and Eric Sprott, one of the first people they would think to call. Pinetree held investments in more than 400 public and private resource companies at its peak, with a big focus on precious metals. The firm’s investments had a fair value of almost $800-million by the end of 2010.
Mr. Inwentash came under scrutiny for his high compensation during those heady days. He earned $11.2-million in 2006, $21.4-million in 2007, and a staggering $34.6-million in 2010, which was more than 6% of Pinetree’s year-end market capitalization. It was the second-highest pay that any Canadian CEO received that year.
Mr. Inwentash and Pinetree were also the subjects of a multi-year insider trading investigation by the Ontario Securities Commission beginning in 2006. However, they never faced formal charges.
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