Billions in public pension funds are now at the center of a storm — and the fallout could reach far beyond New Brunswick. Thousands of civil servants and retirees who trusted their pensions to one investment firm may now be watching that trust unravel.
A powerful new allegation claims that Fredericton-based Vestcor Inc., the firm managing billions on behalf of public sector employees and retirees, helped trigger massive financial losses for investors across Canada. At the heart of it all is a failed merger between two tech companies — one that some shareholders say was based on distorted numbers and misleading promises. But here’s where it gets controversial: the company accused of inflating the deal’s value is the same one managing the retirement savings of New Brunswick’s teachers, nurses, and government workers.
The accusation: A merger built on inflated promises
Vestcor and one of its senior executives, Mark Holleran, are now facing a petition in British Columbia that could lead to a class-action lawsuit. The claim asserts that Vestcor manipulated the merger valuation between Exro Technologies and SEA Electric Inc., two companies that once promised to revolutionize sustainable transport but ended up costing investors millions.
According to court documents, Vestcor was not a casual bystander. It allegedly played a central role, as both a major shareholder in Exro and a stakeholder in SEA Electric. That meant Vestcor was negotiating from both sides of the table — a fact that raises serious questions about conflict of interest. The lawsuit claims the company “orchestrated and influenced” the merger to protect its own investments, rather than those of the broader shareholder base.
A $300-million deal built on shaky ground
The filing details how Exro paid about $300 million to acquire SEA Electric, banking on projections that SEA would generate $200 million in profit in 2024. Those expectations, the petition argues, turned out to be wildly unrealistic — in the court’s words, “delusional.” As a result, the inflated numbers supposedly drove Exro’s valuation to unsustainable levels.
When the truth came to light, the house of cards collapsed. By late 2024, Exro reported a staggering $226 million loss, including a $211 million impairment to SEA’s assets. The fallout led not just to financial pain for shareholders, but to the complete collapse of Exro itself, forcing it off the Toronto Stock Exchange in October.
Vestcor’s defense — and critics’ doubts
In an email statement, Vestcor CEO Sean Hewitt said his legal team is reviewing the lawsuit, insisting the claims are “unproven and untested in court.” He emphasized that any losses tied to Exro and SEA were “negligible” — amounting to less than one percent of the company’s investment portfolio — and that retirees’ monthly payments remain unaffected. “Given the strength of our clients’ pension plans and continued solid returns, there’s been no impact on pensioner income,” he said.
But critics remain unconvinced. Lawyer Sage Nematollahi, representing the petitioners, argues that the losses are serious — not only for direct shareholders, but also for the thousands of New Brunswick pensioners indirectly tied to Vestcor’s failed bet. “A lot of pension money is tied up in an investment that’s done poorly,” she told CBC News.
The bigger picture: Trust in public fund management
Vestcor oversees a vast $23 billion in assets as of 2024, up $2 billion from the previous year. It manages funds for a wide range of public workers — from hospital staff and teachers to judges and Crown corporation employees — as well as institutional clients like the University of New Brunswick’s endowment. Originally created in 2016 from a former provincial agency, Vestcor was meant to run investments at arm’s length from political influence. But this lawsuit could test the limits of that independence.
The petition, filed by shareholders Bryan Irwin from British Columbia and Ontario investor Mike Zienchuk, alleges that Vestcor and Holleran acted “in bad faith” as de facto officers of Exro, prioritizing self-interest over fiduciary responsibility. Irwin reportedly lost $22,000, while Zienchuk’s holdings of $4 million took a significant hit. According to Nematollahi, roughly 500 other investors have already reached out about joining the proposed class action — a number that could grow into the thousands.
Meanwhile, Zienchuk and another investor, Allan Crosier, have launched a separate lawsuit in Alberta naming Exro, two former executives, its financial advisors, and its insurers — suggesting this legal saga is far from over.
A clean tech dream that burned too bright
Exro once positioned itself as a leader in clean technology, designing electronics to improve the performance of electric vehicles and energy storage systems. SEA Electric’s involvement was supposed to strengthen that vision. Yet, if the allegations are true, the merger that was meant to accelerate progress instead exposed structural weaknesses and overinflated projections — revealing just how fragile investor optimism can be when financial transparency breaks down.
The conversation: What does accountability look like?
The claims against Vestcor haven’t been proven, but the controversy has already raised difficult questions about oversight, transparency, and the governance of public pension funds. Should a manager handling billions in taxpayer-backed savings be allowed to invest in high-risk startups it partially controls? And how should pensioners feel knowing their contributions may have helped finance a deal that imploded?
Here’s the question to you: Do public institutions like Vestcor have a moral obligation to avoid speculative investments altogether — or is some level of risk justified in pursuit of growth? Share your thoughts below — this debate about pensions, power, and responsibility is just getting started.
