RCC Holdings Corp fka RCCH

[lucky, mydog]

The Hess mess

On Jan. 30, RCC announced the addition of three Canadians to its board of directors "in preparation for its new International Exchange up listing."

Archie Thompson, identified as a resident of Canada, led off the list of new directors identified by RCC.

"With many years of worldwide entrepreneurial experience in many countries, Mr. Thompson will advise the company on international projects and will help with Business development helping to bring Canadian companies to the international market through RCC/IWS channels," RCC added in a vague biographical sketch.

As it turns out, Archie Thompson is more properly identified as Samuel Archibald Thompson or, as subsequently disclosed on RCC's website, Samuel A. Thompson. It also turns out that Mr. Thompson of Laval, Que., is listed as a director of Barbados-incorporated Caribbean Private Investment Corp. (CIPC), a company with which RCC proudly announced a "partnership" in a gushing news release in April of last year. Interestingly, RCC made no mention of Mr. Thompson in that news release and, conversely, made no mention of CIPC when it plumped up his biographical information on the company's website several days after announcing his appointment as a director.

Pierre Morin is identified as the second Canadian added to RCC's board of directors in advance of the company's oft-touted "up listing."

"Pierre combines many years of formal Canadian Government experience with entrepreneurial business endeavors," RCC reported on Jan. 30. "Mr. Morin will serve on the Board of Directors as well as take on the role of Chief Country officer for Canada."

Somehow that vague sketch triggered speculation that the Mr. Morin mentioned in the news release was a Quebec lobbyist, a suggestion that Stockwatch sources say was confirmed to some RCC shareholders by Mr. Newton.

Stockwatch contacted a registered Quebec lobbyist named Pierre Morin, head of Laval-headquartered Pierre Morin Conseil, to ask whether he had in fact joined RCC's board of directors.

"I've neither been invited nor agreed to join the Board of RCC Holdings," Mr. Morin replied. "It's some other Pierre Morin, unknown to me."

Stockwatch subsequently discovered that Mr. Morin of Pierre Morin Conseil served in an executive capacity for a Quebec-headquartered wastewater treatment company. Given that rather remarkable coincidence, Stockwatch contacted Mr. Morin again.

"Have you ever had any dealings with, or even heard of, RCC Holdings Corp. or its subsidiary International Wastewater Systems?" Stockwatch asked Mr. Morin.

"Absolutely no dealings and had not heard of RCC or its subsidiary until yesterday when an inquiry came in from someone stating he was an investor in the company," Mr. Morin unequivocally told Stockwatch on Feb. 3.

As with Mr. Thompson, RCC padded out the biographical information of its new director Mr. Morin on the company's website several days after issuing the Jan. 30 news release, but there is not enough detailed information to conclusively identify him. RCC's chief executive officer Mr. Newton would not provide Stockwatch with any contact information for Mr. Morin.

Mr. Hess, clearly the marquee player, rounded out the reported Canadian additions to RCC's board of directors.

"Mr. Hess is former President of the Toronto Stock Exchange and will advise the company on key financial matters as it grows and develops," RCC stated.

That claim, coupled with all the touting dating back to May of last year about "up listing," had many naive RCC shareholders who follow the company on an Internet chat site, InvestorsHub.com (iHub), in a tizzy as they embraced the fanciful notion that the company was on the verge of listing on the Toronto Stock Exchange (TSX).

As more seasoned market watchers like Jim Bishop and Janice Shell quickly pointed out to the excitable iHub RCC fans, Mr. Hess had never served as president of the TSX and the chances of a massively diluted, non-reporting pink sheet outfit moving to Canada's premier exchange ranged from slim to none at all.

Indeed, Mr. Hess was never president of the TSX, but after heading the Alberta Securities Commission (ASC) for seven years he did serve as president and chief executive officer of the CDNX, the junior exchange that resulted from the merger of the scandal-plagued Vancouver Stock Exchange and the less than pristine Alberta Stock Exchange, from November of 1999 until November of 2001. After the TSX acquired the CDNX in July of 2001, the junior exchange was later rebranded as the TSX Venture Exchange (TSX-V).

Somewhat surprised at the news that the former head of the CDNX had joined the board of directors of a subpenny pink sheet promotion, Stockwatch called Mr. Hess at CPVC Bromont Inc., a TSX-V capital pool company that is still searching for a qualifying transaction. Mr. Hess is the president, chief executive officer and chief financial officer of CPVC Bromont.

Repeated calls to CPVC Bromont simply yielded an outgoing message that Mr. Hess was not available and did not want a message left for him, but could be contacted by e-mail. On Feb. 3, Stockwatch obliged with an e-mail to Mr. Hess, followed up with an identical e-mail on Feb. 4 and then left a message for him at CPVC Financial Corp., a Montreal-headquartered merchant banking firm where he serves a chairman.

"Have you had any dealings with RCC Holdings or its subsidiary International Wastewater Systems and have you agreed or been invited to serve as a director of RCC Holdings?" Stockwatch asked after pointing out that RCC had issued a news release with that claim on Jan 30.

"Sorry for the slow response," Mr. Hess finally replied shortly after Stockwatch left a message at CPVC Financial on Feb. 4. "I think any questions about its board should be addressed to senior management of the company."

Taken aback that the former ASC chairman who went on to head the CDNX for two years would dodge such a straightforward question and suggest that it should be addressed to the "senior management" responsible for issuing the suspect announcement, Stockwatch made another attempt to elicit an answer to the question.

"RCC Holdings Corp. is a non-reporting U.S. company quoted on the Pink Sheets," Stockwatch noted in a Feb. 4 response to Mr. Hess's e-mail. "Given your regulatory background and other securities industry experience, I suspect that you are at least somewhat familiar with that venue and can perhaps appreciate why the usual journalistic need for corroboration is even more acute when dealing with such a company.

"In a Jan. 30 news release in which you are incorrectly identified as the former president of the Toronto Stock Exchange, the senior management of RCC Holdings, specifically chief executive officer Gene Newton, claims that you have been added to the company's board of directors.

"I am looking for independent corroboration of that claim and, frankly, it seems clear to me that you are in the best position to either provide that corroboration or debunk the claim by answering a straightforward question.

"So, have you agreed or been invited to serve on the company's board of directors?"

An e-mail receipt shows that Mr. Hess read that message, but he did not bother to respond.

On Feb. 5, however, RCC issued a news release "to clarify certain information" that had been presented in its Jan. 30 announcement.

The cleanup

RCC opened its Feb. 5 news release with some vigorous backpedalling with respect to the so-called "up listing" that it had been touting in a number of misleading news releases dating back to May of last year.

It turns out that all the talk of "up listing" and the "transition to the International Exchange" and RCC's gushing gratitude to "the Exchange and the attorneys involved for all of their help and support" did not really mean what many of the company's shareholders took it to mean.

"The reference to 'up listing' in the press release is a reference to the intention of RCC to pursue a merger of its wholly-owned subsidiary, RCC International Waste Water Systems Incorporated ('IWS') with a publicly listed shell company with cash assets (the 'Proposed Transaction'), which transaction would be subject to applicable stock exchange and regulatory approval," the company's clarifying news release stated. "RCC has been in discussions with several possible shell companies in respect of the Proposed Transaction."

The Feb. 5 news release went on to address RCC's Jan. 30 claims about Mr. Hess.

"The Prior Release also contained an error in that Bill Hess has not been appointed as a director of RCC or IWS at this time and his biography should have referred to the Canadian Venture Exchange and not the Toronto Stock Exchange," the company rather lamely reported.

"Mr. Hess will only become a director of IWS if the Proposed Transaction proceeds and is completed in a manner acceptable to Mr. Hess," the clarifying news release issued by RCC's vaunted senior management continued, presumably to the satisfaction of Mr. Hess.

In practical terms, it remains to be seen whether cash-strapped RCC can find a public shell desperate enough to merge with the obscure subsidiary of a massively diluted, non-reporting pink sheet outfit. If so, it would then remain to be seen whether securities regulators and officials at even a junior exchange like the TSX-V would hold their noses and allow the transaction to proceed. In the seemingly unlikely event all of that transpires, it remains to be seen whether Mr. Hess will provide his stamp of approval and join the board of directors.

http://www.stockwatch.com/swnet/newsit/newsit_newsit.aspx?bid=Z-U:RCCH-1574156&symbol=RCCH&news_region=U