Cowpland under stock spotlight

Shares Canadian securities regulator launches investigation into trading activity of Corel chief executive.

The Ontario Securities Commission has launched a full investigationading activity of Corel chief executive. into the trading activities of Corel CEO Michael Cowpland.

Cowpland is being scrutinised by Canada's leading securities regulator for selling C$20.5 million in stock one month before the share price plummeted.

Corel has been posting large losses since it decided to go head-to-head with Microsoft in the office suite market with its WordPerfect bundle.

Previously, Corel had made a name for itself in the graphics market with its CorelDraw software.

Corel denied there was anything abnormal about the investigations. A representative remained adamant: 'Such investigations are normal when there is a large stock sale. There is nothing strange about it.'

Cowpland sold the stock in August 1997, when Corel shares were trading near C$8.40. A month later, the stock dived by about 40 per cent when the company warned investors that it was likely to lose US$32 million in the third quarter.

Share prices fell even further when Corel announced a couple of weeks later that losses were likely to hit $20 million for the fourth quarter because of slow sales.

The investigation was uncovered when artificial heart company World Heart, with which Cowpland has business connections, mentioned the search in a prospectus with the Ontario Securities Commission.

Cowpland has maintained he unloaded a large stake in the company to pay off his loans.

'He sold off his shares for personal reasons, as he had mentioned before,' said a Corel representative.