Securities bureau sees Pennichuck deal

Pennichuck Corp. could be close to reaching an agreement with state and federal securities regulators over real estate transactions made under former Chief Executive Officer Maurice Arel, according to the company’s latest filing with the U.S. Securities and Exchange Commission.

The state Bureau of Securities Regulation and the SEC are investigating why Pennichuck didn’t disclose Arel’s 1998 purchase of his Nashua home. In its SEC filings, the company said Arel got a significant discount worth between $50,000 and $75,000 on the home.

Arel stepped down unexpectedly last year, saying his decision to leave the company after nearly two decades was not related to the investigations.

The bureau also is looking into whether Pennichuck should have disclosed giving more than $500,000 worth of business to the landscaping business of Arel’s son between 1996 and 2002 as well as why the company never disclosed that nearly all of its joint real estate ventures were formed with the same developer, John Stabile, and why Pennichuck “failed to exercise adequate oversight of the activities of those joint ventures,” according to the company’s most recent quarterly report, or Form 10-Q, which was filed with the SEC on Aug. 13.

The inadequate oversight included failing to obtain or keep adequate financial records, contracts, correspondence and other materials.

Any agreement with the securities regulators would involve an undetermined amount of money that would be paid into a fund for Pennichuck shareholders, a fine that would be paid to the bureau and a payment to defray the bureau’s expenses, according to the report.

Pennichuck also is in negotiations with Arel to determine what amount of the settlement cost, if any, he would be responsible for, the report said.

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