Langbar International

Portus boss in 'poor' mental shape:

Friday, December 16, 2005 Page B4

Boaz Manor is so upset about the collapse of Portus Alternative Asset Management Inc. that he cried "like a little boy" during a session with his psychiatrist and has had suicidal thoughts, his doctor said in a letter filed in court.

Mr. Manor's "personality is fragile and he has been experiencing a protracted crisis for several months, which is reflected in states of anxiety, depression, accompanied by suicidal thoughts and sometimes regressive states, disassociative states and incoherent thinking," Dr. Shmuel Fenning, an Israeli psychiatrist, said in the letter.

Mr. Manor, who co-founded Toronto-based Portus in 2003, left for Israel shortly after the hedge fund company was forced into receivership last March by regulators amid several investigations, which now includes a criminal probe.

The receiver, KPMG Inc., has gone to court in Canada and Israel to force Mr. Manor to co-operate in its efforts to recover more than $800-million in assets

KPMG has alleged in several court filings that Mr. Manor has continued to move Portus money around the world since leaving for Israel.

Mr. Manor, 35, has denied any wrongdoing and filed a variety of legal motions to fend off an interview with KPMG.

However, his legal options are running out and yesterday his Israeli lawyer indicated that Mr. Manor is expected to meet with KPMG next month.

In his letter, which was translated from Hebrew by KPMG's lawyers, Dr. Fenning said Mr. Manor's condition has deteriorated in recent weeks "as the inquiry [with KPMG] is drawing closer."

"Despite intensive drug treatments, his general mental condition is poor," the letter said. Dr. Fenning added that Mr. Manor is concerned that he will not be able to endure the interview because of his "mental condition."

"His greatest fear is that he should burst into tears and enter a state where it would be difficult for him to co-operate," Dr. Fenning added.

"During the two last sessions I witnessed a 'live' demonstration of what he meant: In one of the sessions he cried like a little boy throughout almost the entire session and was unable to co-operate with me and in the last session, although he did not cry, he was highly unconcentrated."

The letter did not impress KPMG's lawyers, who filed a motion in an Israeli court yesterday to have Mr. Manor jailed for failing to turn over nearly $9-million (U.S.) in diamonds he allegedly bought last summer with Portus money.

An Israeli judge had given Mr. Manor until last Wednesday to turn over the roughly 100 stones or face jail.

KPMG has alleged that Mr. Manor arranged the purchase of the gems through a dealer in Hong Kong.

His wife, Wendy Yu, and her sister, who lives in Hong Kong, allegedly helped with the transaction. Ms. Yu has denied any wrongdoing and her sister has confirmed to KPMG that she picked up several packages from the dealer last June and July, but she did not know what was inside and gave them to an unnamed individual.

In an affidavit filed in an Israeli court on Wednesday, Mr. Manor said he doesn't have the diamonds. He added that he was "unable to submit a more detailed statement since I fear that I may incriminate myself."

A hearing on the receiver's motion is expected next week.

However, Judge Shmuel Baruch, who ordered Mr. Manor to produce the stones, has indicated that he will consider imprisonment.

"A deterioration in his condition"

Here is a translated excerpt from a letter originally written in Hebrew by Dr. Shmuel Fenning, an Israeli psychiatrist, which was filed in court yesterday and details the state of mind of Boaz Manor, the co-founder of Toronto-based Portus Alternative Asset Management Ltd., in the wake of his company's collapse in 2003.

"Despite his past economic successes, Boaz's personality is fragile and he has been experiencing a protracted crisis for several months, which is reflected in states of anxiety, depression, accompanied by suicidal thoughts and sometimes regressive states, dissociative states and incoherent thinking.

"In recent weeks there has been a deterioration in his condition as the inquiry is drawing closer. Despite intensive drug treatments, his general mental condition is poor. Boaz expressed several times to me his anxiety that he would not be able to endure the inquiry due to his mental condition.

"His greatest fear is that he should burst into tears and enter a state where it would be difficult for his to co-operate with the court, in which case he is also liable to be charged with contempt of court.

"During the two last sessions I witnessed a 'live' demonstration of what he meant: In one of the sessions he cried like a little boy throughout almost the entire session and was unable to co-operate with me and in the last session, although he did not cry, he was highly unconcentrated."