Ex-Aquablue consultant calls for police probe

A former consultant with Aquablue is calling on police to launch an investigation into the company and its failed project in Smiths Falls, Ont.

In June 2009 Aquablue International, a bottled-water company, issued a news release that "formalized the transfer" of the shuttered Hershey chocolate factory into its control. But the company did not have the financing inplace tocompletea lease-to-own agreement with Hershey's, or to open the plant it said would hire up to 200 people.

Many in the audience like Tom Ondrejicka, a former communications adviser to Aquablue, were led to believe it was a done deal. Instead, Ondrejicka said, "It wasa complete and utter lie."

"There were investors in that room and contractors in that room and local businesses here that moved forward providing services because of that press conference and if that isn't fraud, man, I don't know what is."

Smith Falls lost its biggest economic engine in 2007 when Hershey announced it was shutting down its chocolate factory and shop, which employed 500 people and drew hundreds of thousands of tourists each year.

Plant was supposed to employ 200 people in 2011

Aquablue International said it planned to create 200 high-paying jobs by 2011 by converting the factory into a water-bottling facility.

However, at the end of that year it was revealed the company was still looking for financing to convert the factory, and the company had not yet completed a lease-to-own agreement with Hershey.

By March 2010, the company's assets were frozen and plans to convert the plant collapsed. Aquablue and its owner are now under investigation by the Quebec Securities Commission. The investigation was prompted by complaints by investors.

The commission alleges Aquablue chief executive Manuel Da Silva made representations to potential investors about acquiring the Smiths Falls plant when it was "highly unlikely the project would be carried out."

It also alleges Da Silva deposited funds from investors into his personal accounts.

Residents want answers

It's estimated investors lost nearly $2 million backing Aquablue - including many Smiths Falls business owners and residents who put up hundreds of thousand of dollars for a plant that never opened.

Amit Patel, who owns the local Best Western Hotel, allowed Aquablue officials to charge hotel rooms on a credit account and invested $10,000 of his own money in the project. Patel was never paid for the rooms and has not been repaid the money he invested.

"Everything was looking good, the town backed it so we believed everything was on the up and up," he said.

Patel and other residents want the town to explain publicly why it backed the Aquablue project.

"I think the town owes everyone in Smiths Falls an explanation about what happened, what went wrong, and try to help us out," he said.

Mayor defends town's role

But Smiths Falls Mayor Dennis Staples said he is interested in focusing on the future.

"Our role is to attract new business," he previously told CBC News. "Our role is not to check out business plans for new businesses. We don't do that. We simply encourage people to come to Smiths Falls."

However, Patel said he would think twice before trusting a new business, or his mayor, in the future.