Money laundering allegations…
The High Court has struck out a claim brought against the Bank of Guyana (BoG) for its alleged failure to investigate a suspicious deposit of over $82M made in a Republic Bank Limited (RBL) Guyana account.
The Statement of Claim (SoC) application was brought against BoG by the owners of Precision Woodworking Limited, Ronald and Rustum Bulkan. Both men are brothers.
Ronald Bulkan was also a former Minister of Communities, in the Coalition government.
On Monday, Justice Priya Sewnarine-Beharry dismissed the SOC as being incoherent, obscure, prolix, and lacking precision.
Justice Sewnarine-Beharry also awarded costs in the sum of $250,000 to be paid by the plaintiffs (Bulkans) and $75,000.0 to be paid by the attorneys-at-law due to the prolixity of the pleadings.
According to court documents, the decision stems from a claim by the Bulkans that the Central Bank failed to investigate a deposit of $82,068,617 deposit made on June, 16th, 2011 into an account held in the name of PWL at Republic Bank pursuant to the Bank of Guyana Act, and the Financial Institution Act, Supervision Guidelines and anti -money laundering and Countering of Financing of Terrorism Act.
As a result, the businessmen claimed damages for the torts of deceit and negligence breach of statutory duty, misfeasance in public office and “potential harm, distress and unease.”
However, BoG and its Governor Gobind Ganga through law firm -Ashton Chase Associates- filed an application to have the matter struck out.
The BoG, in its application, contended instead that the Bulkans claim is based on an erroneous premise that the deposit was made by an individual into the account.
The bank explained that the deposit was not cash but a credit by way of provisioning pursuant to the Bank of Guyana guidelines on “loan portfolio review, classification, provisioning and other related requirements” issued under the authority of the Financial Institutions Act (FIA), the account having been classified as non-performing with effect from 31st, May 2011 as a result of the company being unable to satisfy its debts and obligations to RBL.
Further, the bank said that PWL had two credit exposures totaling $405M which was secured by collateral totalling $323,000,000 –the sum of $82 M was unsecured and in accordance with the guidelines, provisioning for the said sum was made so as not to overstate the bank’s assets.
They contended, too, that the Bulkans failed to demonstrate in the Statement of Claim, a breach of statutory duty whether supervisory or investigatory under the BoG Act and in accordance with the Financial Institution’s Act
The bank said that on 22nd March, 2016 the proprietors were informed that an investigation was conducted pursuant to their request by letters dated 13 March 2013 and 25th July 2014, for prosecution of RBL under Section 60 of the FIA and the results thereof.
The bank noted that SoC application, which is without merit, misconceived and an abuse of process of the court was still filed.
Among other things, the Central Bank noted in their application that the businessmen denied that any investigation was done and contended that if it was, it was done without the due care, skill and diligence commensurate with the gravity and seriousness of the allegation of suspicion of money laundering.
They argued that their request to investigate was of a continuing nature and included a request dated March 5th, 2018 by their then Attorney-at-law, Nigel Hughes.
However, BoG rebutted the claim noting that the court has powers under the CPR 2016 on its own initiative or upon application to strike out a SOC if it does not disclose any reasonable ground for bringing the claim, or to grant summary judgment (dismissal) where the claimant has no reasonable prospect of succeeding on the claim.
As such, having read the submissions filed and relied upon by the parties and after mature deliberation, Justice Sewnarine-Beharry found it appropriate to exercise these powers as the SoC does not disclose any reasonable ground for bringing the claim.
The Judge noted SoC seeks for relief/damages for inter alia “jeopardising and exposing the Bulkans to accusations, allegations, investigation and potential prosecution for money laundering”, “potential ruin to reputation” and exposure to “injurious business deal and good will.
However, she noted that the claim did not prove potential harm and not any real harm, loss or damage and at best is speculative.
Further, the Judge described the SoC as an abuse of the process.
“Statements of Claim must be concise… They must plead only material facts, meaning those necessary for the purpose of formulating a cause of action or defence, and not background facts or evidence. Still less should they contain arguments, reasons, or rhetoric,” she said
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