Verit Industries Chairman Sells 38% of Stock to British Investors

Verit Industries Chairman Lavere Lund has sold nearly all of his 40% stake in the struggling Sun Valley company to an English investment group based on the Isle of Man.

Paradene Ltd. agreed last week to pay $2 million or about $6.94 a share for 288,000 shares owned by Lund, or about 38% of the company. Paradene is controlled by Raymond Davey and Patrick Rory Bland. Davey works for a London real estate company and lives in Chichester, England. Bland is a property consultant in Dublin.

Lund, 56, will continue to run Verit, which builds stereo loudspeakers and distributes other consumer products including “close-out” merchandise purchased from other manufacturers.

Verit has been struggling recently. It lost $781,000 on sales of $9.85 million for the fiscal year that ended June 30. The year before, Verit made $137,000, or 18 cents a share, on sales of $25.9 million.

Verit board members Sidney Horowitz and Bernard Hammerman resigned and were replaced by Davey and Bland.

Horowitz said Bland, 50, and Davey, 54, bought controlling interest in Verit for the sole purpose of taking their English companies public in the United States by merging them into Verit. “They were looking to get into an American Stock Exchange Co. that wasn’t heavily capitalized,” Horowitz said. “It is a hell of a way to get control of a company.”

Davey and Bland have already begun consolidating their operations into Verit. Last week, Verit announced it was acquiring WHL Ltd., an English engineering and mining company. Verit said in an announcement that the holding company for WHL is an affiliate of Paradene. No further information was given.

Corporation Without Office

Little is known about Paradene or those running it. “I don’t know what the operating entities are of that organization,” said Jeff Holmes, a Verit spokesman. Paradene isn’t listed in the Isle of Man telephone book. “It’s a corporation that does not have an office per se,” Holmes said.

“Lavere said Bland lives in a castle. He spent a night in the castle,” Horowitz said. “I’m not talking a big house. I’m talking a real castle.”

Bland and Davey did not return calls. Lund declined to comment as well.

Several months ago, Bermuda investor Arthur Dalfen, who owns 5% of Verit, arranged a meeting in Los Angeles between Lund and a group of investors. “There were some people brought to me interested in buying a company on the American Stock Exchange. I brought these people to Lavere, and they made a deal,” Dalfen said.

Dalfen has publicly urged Lund to merge Verit or make an acquisition in order to lift the company’s stock price, which has been trading in the $5 per share range this year. The stock closed Monday at $5.63.

The company has blamed much of its problems on Anthon’s Furs, a fur dealer in Orange County. Verit alleged in a lawsuit that it paid $580,000 to Anthon’s for a shipment of furs in late 1986, but never received delivery. Anthon’s, which subsequently entered bankruptcy proceedings, has denied any wrongdoing.

Horowitz is guardedly optimistic that Verit will turn around. “Anything that will take them out of their problems has got to be good,” he said.