Shal­iza?Has­sanali

A re­port on the Agri­cul­tur­al De­vel­op­ment Bank (ADB) has ex­posed abuse of mil­lions of tax­pay­ers' dol­lars at the State-owned com­pa­ny be­tween 2004 to 2010. The re­port, dat­ed Sep­tem­ber 25, 2012, was sent to chair­man Rudy Ma­haraj and Food Pro­duc­tion Min­is­ter De­vant Ma­haraj last Wednes­day.

An in­ves­ti­ga­tion is un­der­way­by the ADB to de­ter­mine if there was any mal­prac­tice or malfea­sance on the part of the bank's em­ploy­ees, some of whom it is al­leged, doc­tored doc­u­ments to have loans ap­pear as vi­able. Among the is­sues raised in the re­port are:

• $50 mil­lion in le­gal costs paid to a law firm

• $120 mil­lion in loss­es

• The pur­chase of $5 mil­lion in of­fice fur­ni­ture

• Rental of an ADB of­fice for $5 mil­lion

• Hir­ing of an un­qual­i­fied­per­son­al as­sis­tant whose month­ly salary was $30,000

• Nepo­tism

• A $63,000 cred­it card scan­dal

• $41 mil­lion in ar­rears and bad loans

ADB-A cash cow

On Fri­day, Ma­haraj (Rudy) said the bank served as a "slush fund" for cer­tain in­di­vid­u­als. "The ADB­was a cash cow for them. They em­ployed their own peo­ple...they found ways to give out mon­ey in terms ofloans for their own." In the next ten days, Ma­haraj said, a foren­sic au­dit in­to the ADB will be held. "The au­dit is go­ing to bring every­thing to light. What we have been look­ing at is just a tip of the ice­berg," he said.

Ma­haraj said hasti­ly formed com­pa­nies were grant­ed mil­lions in loans by the bank. "We have about five cas­es in­volv­ing mil­lions of dol­lars in loans that have not been re­paid." Ma­haraj said the ADB could not ac­count for mil­lions. Since the bank's in­cep­tion, he said, it had lost more than $270 mil­lion. "The op­er­a­tion of the bank, in gen­er­al, is cost­ing us about $2.2 mil­lion per month. Our rev­enue is about $2.8 mil­lion per month. How on earth can you ex­plain these kinds of loss­es?"

Ma­haraj said one client had set up a juice plant in O'Meara Es­tate, Ari­ma. "The se­cu­ri­ty for the loan they used was an eTecK ware­house that be­longs to the Gov­ern­ment. The ware­house was sup­posed to be out­fit­ted. The loan was giv­en out in one tranche when noth­ing was done to the build­ing. Yet, an em­ploy­ee and man­ag­er ma­nip­u­lat­ed the re­port say­ing that con­struc­tion was on­go­ing."

Ma­haraj said the bank was mov­ing to seize the as­sets of these delin­quent cus­tomers who have been evad­ing in­stal­ments. "Some of the cus­tomers have cov­ered them­selves with the law. It seems to me they have been prop­er­ly ad­vised on how to con the bank and coun­try at large. If we get ten per cent back it would be a lot." Al­so, le­gal briefs were giv­en to cer­tain at­tor­neys, Ma­haraj said.

"To walk a le­gal doc­u­ment across the road they were charg­ing us $10,000. I have now fired the en­tire pan­el of at­tor­neys." The ADB has since re­duced its le­gal fees by 75 per cent.

Board op­er­at­ed un­eth­i­cal­ly

A copy of the re­port which the Sun­day Guardian ob­tained high­light­ed the dis­missal of the bank's for­mer CEO See­bal­ack Singh in 2002. The re­port re­vealed that Singh­was un­com­fort­able with the board's di­rec­tive to in­vest sig­nif­i­cant sums of the bank's mon­ey in short-term in­vest­ments with CLI­CO, which a 2010 Au­di­tor Gen­er­al's re­port deemed in­ap­pro­pri­ate. Singh took the mat­ter to court. The re­port said the for­mer board had op­er­at­ed in an un­eth­i­cal and ques­tion­able man­ner.

It re­vealed the board, led by then chair­man Noel Gar­cia, al­leged­ly paid $5 mil­lion in le­gal fees to a law firm to rep­re­sent the bank in Singh's case. A source at the ADB saidin 2011, the bank agreed to set­tle Singh's dis­missal out of court, af­ter he won the mat­ter in the Court of Ap­peal. "We were pret­ty sure he would have won in the Privy Coun­cil and we would have had to pay out mil­lions of dol­lars," the source added.

The re­port al­so re­vealed that the ADB had ac­cu­mu­lat­ed more than $120 mil­lion in loss­es be­tween 2004 to ear­ly 2010. How­ev­er,the bank has been mak­ing sub­stan­tial prof­its and sur­plus­es un­der its cur­rent board, the re­port re­vealed. Gar­cia, the re­port stat­ed, in­struct­ed the board to rent an of­fice in Port-of-Spain which amount­ed to $5 mil­lion over a six year pe­ri­od.

A fe­male per­son­al as­sis­tant, whose qual­i­fi­ca­tions could not be ver­i­fied, was paid $30,000 month­ly to work at the said­of­fice, which was out­fit­ted with $5 mil­lion in ex­ot­ic fur­ni­ture. The fur­ni­ture was auc­tioned for $200,000 in 2011 af­ter the clo­sure of the of­fice. "This par­tic­u­lar chair­man used this of­fice for host­ing pri­vate events and con­duct­ing po­lit­i­cal meet­ings with se­nior mem­bers of the PNM," the re­port said.

The re­port al­so iden­ti­fied a close rel­a­tive of Gar­cia who ob­tained a job at NAMDE­V­CO with­out be­ing in­ter­viewed. "This hap­pened with­out board and min­is­te­r­i­al ap­proval. She re­ceived $17,000 a month plus trav­el­ling,"?the source stat­ed. For­mer CEO of the bank Jacque­line Rawl­ins, the re­port showed, was al­lowed to ac­cu­mu­late more than 200 days of va­ca­tion leave.

Cred­it card scan­dal

In2010, the re­port said a man­ag­er used the bank's cred­it card to fi­nance a lav­ish cruise to Spain and the Mediter­ranean. The amount spent, the source said, was $63,000, which far ex­ceed­ed the card's lim­it. "The man­ag­er made pur­chas­es in a man­ner that was not per­mis­si­ble un­der gov­ern­ment pol­i­cy. No ac­tion re­gard­ing this ir­reg­u­lar use of the cred­it card was tak­en," the re­port ex­plained.

The re­port iden­ti­fied $41 mil­lion in ar­rears and bad loans over a ten-year pe­ri­od from the ex­ist­ing loan port­fo­lio. From 2004 to ear­ly 2010, these loans, which were not prop­er­ly per­fect­ed, were sent to the ADB's Re­cov­er­ies De­part­ment, but left un­at­tend­ed. "The on­ly item that is in the bank's pos­ses­sion are promis­so­ry notes," the re­port not­ed.

One such loan­was grant­ed in 2007 to Nykosi's Ltd, whose re­main­ing prin­ci­pal is $5,390,000 plus ac­crued in­ter­est of $1,790,870.80 and late in­ter­est fees of $490,088.20. So far, Nykosi Ltd had not made a pay­ment since the in­cep­tion of the loan.

Ma­haraj: The ADB a feed­ing fren­zy

Ma­haraj (De­vant) said the bank was a "feed­ing fren­zy" for the PNM. "What I found most ob­scene was the fact that the ADB had a func­tion­ing board­room, but they had the gall to lease a build­ing, where they wined and dined. This place was out­fit­ted with a wine cel­lar and fine din­ing ac­cou­trements. This was a broth­el for the ADB and the PNM."

Ma­haraj said he was amazed that the board act­ed with im­puni­ty at the ex­pense of tax­pay­ers. "We will be pur­su­ing vig­or­ous­ly and with sin­gle-mind­ed de­ter­mi­na­tion all pos­si­ble le­gal re­sources avail­able."

Gar­cia: Bring on the au­dit

Gar­cia, in re­sponse to the al­le­ga­tions, urged the ADB board to "bring on" the au­dit. "If they want to waste mon­eyI have no prob­lem with that." On the rental of the of­fice, Gar­cia ex­plained: "I met that there. There was a jus­ti­fi­ca­tion for the of­fice. The ADB was fur­nish­ing its of­fice which was not Os­ha?com­pli­ant." The of­fice, which Gar­cia de­scribed as nor­mal, ac­com­mo­dat­ed him and oth­er de­part­ments.

Gar­cia de­nied the of­fice was equipped with a wine cel­lar, used for par­ty meet­ings and fur­nished with ex­ot­ic fur­ni­ture. "That is a set of rub­bish.A fab­ri­ca­tion...a slop­py lie. I don't know what is their mo­tive. This is so fool­ish and in­fan­tile." Ques­tioned about the per­son­al as­sis­tant who al­leged­ly col­lect­ed $30,000 month­ly, Gar­cia said: "That is not true. She was paid $6,000 and was qual­i­fied...she had a Mas­ter's."

He said the dis­missal of Singh did not hap­pen in his time. Probed about the close rel­a­tive who ac­quired a po­si­tion with NAMDE­V­CO, Gar­cia replied: "She is qual­i­fied and ap­plied for the po­si­tion as a field of­fi­cer. I don't in­ter­fere in those things. As far as I am aware she is still work­ing there."

Rawl­ins: No re­port­ed cred­it card ir­reg­u­lar­i­ties

De­fend­ing her 200-day va­ca­tion, for­mer CEO Rawl­ins said there were sev­er­al in­stances when she ap­plied for va­ca­tion and the re­quest was not grant­ed, or grant­ed and per­mis­sion with­drawn. "The fact that I had this quan­ti­ty of va­ca­tion was not due to an un­will­ing­ness or re­fusal for any rea­son to utilise my va­ca­tion." She al­so jus­ti­fied the cred­it card use, which had been as­signed to the man­ag­er while abroad.

The man­ag­er, Rawl­ins said, was placed in a sit­u­a­tion where she lost ac­cess to her own funds and used the card. "Im­me­di­ate­ly on her re­turn to the coun­try and even be­fore her re­turn to work, she re­quest­ed an in­ter­im state­ment from the cred­it card bank to find out the amount of charges which she had in­curred...The man­ag­er im­me­di­ate­ly made full pay­ment in re­spect of all charges which she in­curred."

Rawl­ins said the man­ag­er did not shove the mat­ter un­der the car­pet but came to her with the mat­ter. "I spoke to the cor­po­rate man­ag­er in­di­cat­ing my con­cerns. I re­it­er­at­ed the bank's pol­i­cy re­gard­ing cor­po­rate cred­it card us­age and out­lined the prob­lems which could have arisen, par­tic­u­lar­ly with re­spect to non-pay­ment. I em­pha­sised that al­though that par­tic­u­lar sit­u­a­tion was a gen­uine emer­gency, both the bank and I would frown up­on and cen­sure any re­oc­cur­rence."

Rawl­ins said there had been no re­port­ed ir­reg­u­lar­i­ties with re­spect to cor­po­rate cred­it card us­age. With re­gards to the ADB favour­ing law firms, Rawl­ins said the ap­point­ment of at­tor­neys had al­ways been a board de­ci­sion and at no time did she de­cide which at­tor­ney should get le­gal work from the bank. Sun­day Guardian was un­able to reach Nykosi Ltd as both tele­phone num­bers were out of ser­vice.