Vestcor Inc. is the target of a class action lawsuit alleging a specific transaction ended up costing a group of Canadian investors significant financial losses.
“Our legal team is currently evaluating the merits of the lawsuit; the claims have not been tested in court,” the investment organization said in a statement. “We have confidence in our practices and have no reason to believe that any Vestcor employees acted inappropriately.”
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The class action, filed in British Columbia, alleges an inflated value of a corporate merger completed in 2024 between Exro Technologies and SEA Electric. Vestcor, which manages $23.1 billion in assets for more than 114,000 pension plan members in New Brunswick, is a majority shareholder in Exro. Net proceeds of the offering were approximately US$27.85 million.
The court filing argues that the acquisition plan with an expectation for SEA to produce $200 million in profits in 2024 was “delusional.”
In its statement, Vestcor said the impact of the investments were “negligible on the overall performance of our clients’ portfolios.” The investment organization guaranteed there’s no impact to the monthly pension income of plan members.
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