waste control and transportation business, has been charged by the Ontario Securities Commission with using inside information to make $16.5 million.

The regulatory agency begins hearings today into allegations that Mr. DeGroote and two partners used inside information to sell more than $60-million worth of shares in his company, Laidlaw Inc.

Mr. DeGroote, who is embroiled in a long-running Supreme Court battle for possession of Perot's Island in Riddell's Bay, declined comment on the charges.

A spokesman for Mr. DeGroote, who is off the Island, said: "Because of the nature of what is happening, Mr. DeGroote cannot make any comment until after tomorrow.'' The charges involve Mr. DeGroote, long-time business associate Mr. Henri Herbots of Belgium and Mr. W. Keith Walker, a broker with Toronto-based Midland Walwyn Capital Inc.

The OSC alleges that Mr. DeGroote and Mr. Herbots short-sold Laidlaw shares through a company they controlled called Seakist Overseas Investments Inc.

Selling short occurs when an investor borrows shares from a brokerage firm and sells them in the market with the intention of buying them back later at a lower price.

The OSC said Seakist shorted three million Laidlaw shares valued at $61.2 million between January 31 to March 13, 1991.

Toronto Press reports state that on March 13, Laidlaw announced that its second quarter results ending February 28 would show a drop in revenue, a 50-cent cut in per-share profit and no contribution to earnings from its subsidiary ADT Ltd. which makes alarm systems.

The news contradicted company officials who had been predicting a 20 percent increase in operating profit. Analysts had also expected up to $10 million in earnings from ADT.

The day after the March 13 announcement, Laidlaw shares dropped more than $3 to $143 on the Toronto Stock Exchange.

The OSC alleges that Seakist covered its short position by buying back the three million shares for about $44 million. As a result, Seakist turned a net profit of about $16.5 million.

Mr. DeGroote, who was a director of ADT at the time, is alleged to have known in January that Laidlaw would not meet its earning expectations.

The Commission alleges that Mr. DeGroote either controlled the activities of Seakist and earned all but $500,000 from the transactions, or funded Seakist's trading by lending Mr. Herbots about $27 million at 20 percent interest.

The Commission also says that Mr. Herbots and Mr. Walker hid Mr. DeGroote's involvement in Seakist's trading.

Mr. DeGroote, 59, sold his control of Laidlaw in 1988. The transaction saw him pocket Cdn$499 million. After the deal, he moved to Bermuda.