BLJSTNKSS WATCH

Christopher Ondaatje’s Bay Street odyssey

A bold financier predicts that the 1990s will be a decade of disorder, as bad or worse than the 1930s

Peter C. Newman July 13 1992
BLJSTNKSS WATCH

Christopher Ondaatje’s Bay Street odyssey

A bold financier predicts that the 1990s will be a decade of disorder, as bad or worse than the 1930s

Peter C. Newman July 13 1992

Christopher Ondaatje’s Bay Street odyssey

BLJSTNKSS WATCH

A bold financier predicts that the 1990s will be a decade of disorder, as bad or worse than the 1930s

PETER C. NEWMAN

Few Bay Streeters have created a greater air of mystery about themselves than Christopher Ondaatje, 59, the Ceylonese-born adventurer who in 1955 arrived in Canada with $12—and this week returns to the money wars as proprietor of the securities firm he founded in 1970.

Definitely his own breed of cat, who instead of fitting into categories invents them as he goes along (he was a member of the 1964 gold-medalwinning Olympics bobsled team and has written three best-selling books), Ondaatje sold his interest in Loewen, Ondaatje, McCutcheon & Co. in 1988 at $9 a share (for a total of just under $15 million), and last week recaptured control at $2 a share. That ensures his return as a major financial force in the Canadian market, though the motive and direction of his efforts remain as mysterious as ever.

While Ondaatje assured LOM shareholders that the firm would be returned to its former glory days as “one of Canada’s foremost investment dealers” and pledged an equity infusion of $25 million, he also announced his intention of selling back to the employees three of the firm’s main operating arms. They include the profitable division that specializes in domestic institutional sales and the Paris-based department that handles European investment banking. LOM Western Ltd., which concentrates on speculative runs on the Vancouver Stock Exchange, has since been sold to Peter Brown, a former LOM executive, for $11.5 million. (Brown has no use for Ondaatje. “The arrogance of your stance will not come as a surprise to anyone who knows you,” the Vancouver promoter wrote to him before the sale was completed. “You have done sufficient damage to this company already that any gentlemanly instinct left in you ought to require you to disappear quietly into your twilight years.”) From a talk I had with him in Toronto just before he took a run at his former company, it was clear that Ondaatje has no intention of vanishing into his twilight years or anywhere else. He is determined to use LOM’s well-honed

infrastructure to launch himself internationally into the information economy, the only investment course he believes worth pursuing in these postindustrial days. “The period 19871988 not only ended the postwar economy,” he told me, “it ended the industrial economy, the manipulation of raw materials for profit. That economy is dead, particularly in North America, because manufacturing costs are rising while disposable income is dropping. The old industrial economy will give way to a new information economy based on the manipulation of data on a small scale.”

After leaving LOM, Ondaatje retreated to his private holding company, Pagurian Corp., which eventually gave him control over assets worth $1.2 billion. In December, 1988, he sold Pagurian to the Bronfman family’s Edper group, which wanted to grab its $550-million treasury, for $150 million. But Jack Cockwell, Edper’s machiavellian puppet master who had promised to keep Ondaatje on board, instead hung him with empty titles while withholding any real authority because he was not part of the insiders’ management group. According to Ondaatje, Cockwell turned Pagurian into a personal gravy train for the Bronfman group’s managers, forcing them to pump out dividends

whether or not they were justified by the group’s operating division’s performance.

“I was made vice-chairman of Hees and remained chairman of Pagurian,” Ondaatje recalls, “but it just wasn’t the same. When I was running the company, the shareholders were my gods. Sure, I did it for pecuniary gain, but I loved the shareholders’ reaction to what we had achieved. Now, I was just making money for a bunch who wanted more and more dividends. The power I had brought with me was gradually dissipated.”

More than that, Ondaatje was fed up with the Bay Street ethic that equates an individual’s self-worth and net worth. “I told myself,” he remembers, “it’s time to get off; I don’t want to be part of this greed faction anymore; I don’t want to spend my life shifting, shuffling, scheming, scratching, clawing, twisting and turning. So, I resigned from all the boards and went on my journey of self-discovery.”

That journey took him back to Sri Lanka (formerly Ceylon), after a 44-year absence, to search for his roots. His evocative journal of that odyssey, The Man-eater ofPunani, is a gem of a book. The catharsis of tracing his father’s downfall from not enough pride and too much liquor brings Ondaatje’s own psyche into focus, especially when he begins to understand that the senior Ondaatje drank himself to death after overextending his finances to send young Christopher to tony schools in England. “This book,” he says, “is an absolutely personal confrontation with my life. To do that you’ve got to have time and patience. Most of all, you’ve got to tell the truth. You can’t hide behind metaphors, similes or other devices. I found out what drove me was the shame of having lost everything after my family had reached a certain aristocratic status. I literally had to skin myself. The truth hurts. It was a much bigger gamble than any I’ve taken in the business world.”

While he was away, Ondaatje kept a running diary of future political and business trends. Months before it happened, he predicted the reunification of Germany and the collapse of communism. Now, he foresees a major debt crisis in North America at mid-decade, pointing out that if the United States keeps adding to its national debt at the same rate as it did during the late 1980s, interest payments would amount to 100 per cent of its gross national product by 2015.

“There are only two solutions,” he points out. “Economic deflation or inflation of an extreme kind. I predict that the welfare state as we know it is bound to go bankrupt. There will be full-scale migrations out of the major cities; smaller and smaller Third World groups will gain military effectiveness as violence reasserts itself as a common condition of life. As well as the Soviet Union and Yugoslavia, Canada, China and India will break apart. The expanded use of microchips will create the third great revolution of human life, following the agricultural and gunpowder revolutions.”

Ondaatje expects the 1990s to be a decade of escalating political and economic disorder, as bad or worse than the 1930s. “The future,” he says, “belongs to those who are prepared for it.” He is.