The receiver, who was involved in finding an investor for the 100-acre Providence lands, that was once in the control of Chinese investor, BaiShanLin, is clashing with Citizens Bank for his money.
The bank is refusing to pay the $37.47M that accountant Nigel Hinds, of Nigel Hinds Financial Services, is claiming.
The bank’s lawyers, Boston and Boston, in a letter to Hinds last Friday, is claiming that Hinds’s performance was “grossly unsatisfactory”.
However, the lawyer is disputing the bank. He said he found a buyer who paid hundreds of millions of dollars more than the nearest bidder–enough for the bank to collect its monies.
Hinds calculated that his commission was in excess of $37M.
However, the lawyers in the letter pointed to the terms of the accountant’s appointment as receiver of the lands. He noted that it was agreed that he would be paid a commission of 2.5 percent or “such lower sum as the bank in its sole discretion shall determine”…
According to the lawyers, the lower sum has not been decided yet.
The bank stressed that before any discussions on what that figure will be, Hinds must comply with the statutory requirement that he is mandated to follow after the termination of his receivership’s appointment.
Contacted, Hinds denied that his work was unsatisfactory.
“How could you sell a property for $1.5B, pay off the loan in full and then describe the work of the receiver as grossly unsatisfactory?”
Hinds said that his work has been finished for over a month and he has not received a “single cent”.
“The loan has a zero balance and the principal and interest have been paid off. This is very strange.”
Describing the “withholding of payment by Citizens Bank as an “abuse of power”, the accountant said he has raised the matter with the Governor of Bank of Guyana, Dr. Gobind Ganga.
“…And I have shown that the monies deposited in the Receiver’s account was taken out without my consent, removed in such circumstances without a court order. Those things are relevant. I wrote the Governor pointing out breaches to multiple sections of Companies Act.”
Hinds also claimed that the 2.5 percent clause of the bank in his appointment is unfair and unreasonable and without legal merit and anti-contractual.
“It is as if you tell somebody you are to get $100,000 monthly in salary and then tell them you get pay what we decide. It makes no legal sense and has no legal merit.”
Last month, Citizens Bank Managing Director, Eton Chester, wrote, revoking the appointment of Hinds.
The Receiver/Manager claimed then that the bank allegedly attempted to force him to act contrary to the laws. He also hinted that the bank was in a possible conflict of interest situation.
On the other hand, the bank is accusing the accountant of not acting in the interest of the bank as the Receiver/Manager.
The bank blocked attempts by Hinds to make payments from the special account that had been established.
At heart of the matter is the 100-acre land in Providence known as Parcel 130, Block 111, Zone East Bank Demerara.
That land was sold to Sunset Lakes Inc, owned by contractor, Brian Tiwarie, in February 2014.
The Central Housing and Planning Authority (CH&PA) had held on to the property for three years for Tiwarie before eventually selling it for $458M.
A few months later, after he purchased it, Tiwarie turned around and sold Sunset Lakes to Chu Hongbo, the main principal of embattled Chinese company, BaiShanLin. The deal between Tiwarie and the Chinese investor was for US$8M ($1.6B) or almost four times what Tiwarie paid for the land.
The Chinese investor later approached Citizens Bank for financing, drawing down on a $1.1B debenture to create what was an ambitious gated community complete with community centre and all.
However, Sunset Lakes with the new Chinese owner, defaulted on the bank payments which was in excess of $9M per month.
At the end of October, the interest on that $1.1B saw the figure owed to Citizens Bank mounting.
Hinds placed public notices out for the interested parties to bid for the land.
Six bids came, including a $900M bid for 50 acres by Banks DIH, a sister company of Citizens Bank.
However, the Receiver/Manager settled for the highest bid for the entire property which came from Precious Metal Inc., owned by businessman Tamesh Jagmohan. That company made a bid for over $1B, just a little more than what was owed by Sunset Lakes to the bank.
The deal reportedly went through October with the buyer paying the money and taking possession. Works have started. And these works coincided with Hinds’s troubles.
When Hinds attempted to have the funds transferred to Demerara Bank to an interest bearing account, Citizens Bank blocked the move, according to documents seen by this newspaper.
Hinds claimed that as Receiver/Manager, he is bound to protect the interests of all the parties.
In this case, with money just sitting in an account, he wrote all the banks asking for the best interest rates. Only Demerara Bank and the Guyana Bank For Trade and Industry responded.
Citizens Bank did not, despite the account and the monies being there.
In a letter dated November 13, last, Citizens Bank’s chief, Chester, objected to the decision to have the money transferred.
The banker said that Hinds’s conduct amounted to negligence and in effect increased Sunset Lakes’ indebtedness to the bank.
“A prudent receiver would have paid a significant amount of deposit to the debenture holder (the bank) in reduction of the company’s indebtedness and reduce the daily interest.”
The banker pointed to the caveats by a number of parties and claimed that Hinds did not inform Citizens Bank of them.
Hinds insisted he cannot use the deposit by Precious Metal Inc. to pay the loan as the buyer has not yet received title. That is a no-no.
Hinds defended handing over possession of lands to Precious Metal Inc. saying that is normal when more from 50 percent of the price has been paid.
Precious Metal has started works on the Providence property. Several stalled buildings, impressive edifices, have been sitting there idly with works to start soon on them.
The Central Housing and Planning Authority has reportedly visited the site. It has withdrawn its objections.
The particulars of the sale of the 100-acre plot by Sunset Lakes Inc. to Hongbo a few years ago had raised eyebrows.
From all indications, Sunset Lakes breached the agreement by selling the entire plot without building any homes.
How the developer under the Chinese was able to get away with the breaches would raise troubling questions about CH&PA’s monitoring of the housing projects during the reign of the previous PPP/C administration, especially as thousands of persons are on file awaiting house lots.
CH&PA is facing questions over its administration of the lands and other housing programmes.
Recently, it was disclosed that several close friends of the PPP/C administration benefitted from lands on the East Bank of Demerara.
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