European Spa Company Therme Misrepresented Itself in an Effort to Expand Into Canada

A little-known European company with big ambitions has drawn public outrage in Canada’s largest city.

The company, which runs a spa and water park in Romania, is laying extensive plans to develop similar facilities around the world. Its contract in Toronto has offered a blueprint of sorts — a favorable 95-year lease in which the Ontario government bears the upfront costs of hundreds of millions of dollars.

Auditors last year found the contracting process had been unfair and opaque, just as the European spa company, Therme, was pushing forward its plans for a multibillion-dollar expansion to other major cities in North America, Europe and the Middle East.

But a New York Times investigation showed that, in pitching itself to the world, Therme has misrepresented itself, misleading the Ontario government and exaggerating its experience in its bid to secure the Toronto deal.

The investigation, based on corporate filings in three countries and interviews with a dozen people involved in the company’s operations and the bidding process, found that Therme falsely presented itself as an industry player that operated as many as half a dozen spas in Europe.

In fact, it had built and operated just one, outside Bucharest, Romania. And as it pitched its vision for Toronto, Therme’s finances appeared to be shaky. Auditors found it was losing money and had less than 1 million euro (about $1.1 million) in equity.