Canadian province Prince Edwards Island is denying it worked to hurt a tech company involved with a plan to make the province an international hub for online gambling.
U.S.-based Capital Markets Technologies has filed a $25-million lawsuit last week alleging breach of contract and conspiracy.
According to Canada’s Globe and Mail newspaper, the suit was filed three days after Premier Wade MacLauchlan launched an election campaign in which the failed initiative has figured prominently. On Monday, Conservative Leader Rob Lantz called on the province to release all documents related to the venture.
The Globe and Mail uncovered the plan to make the province into a global online gambling center. The story revealed lax oversight and weak conflict-of-interest rules that enabled government officials to invest personally in companies that were working on the project.
After the suit was filed, the province released a statement denying the allegations.
“It just doesn’t hold together in law,” said Jonathan Coady, lawyer for the province told the paper. “There is no legal merit to the claim.”
The suit names the province and several current and former government officials, including recently resigned finance minister Wes Sheridan and former premier Robert Ghiz’s one-time chief of staff Chris LeClair, according to the Globe and Mail.
Capital Markets Technologies has operated a local PEI subsidiary that has gone by three different names—Financial Markets Technologies, Trinity Bay Technologies, and 7645686. The company was a part-owner of a U.K.-based business called Simplex, which ran a high-level financial platform used by banks.
The province worked with Simplex on the online gaming plan.
The Globe and Mail revealed that the connection was formed through CMT, and the two companies maintained a close relationship. The gaming plan fell apart in February, 2012, and the province signed a memorandum of understanding with CMT’s subsidiary to work on bringing the financial platform to the island. But the 90-day period covered by the agreement ended without a deal.
In the lawsuit, CMT executive Paul Maines alleges that shortly after the memorandum expired, Sheridan and LeClair asked the province’s economic development wing to proceed with the financial platform with a different company. The province denies this.
The province says it had no idea CMT was connected to that agreement.
“CMT was not a party to the MOU; there was no understanding or relationship of any kind between the government and CMT.”
