Asha Javeed

The Ur­ban De­vel­op­ment Cor­po­ra­tion of Trinidad and To­ba­go (Ude­cott) is seek­ing mil­lions in fi­nan­cial com­pen­sa­tion from its for­mer ex­ec­u­tive di­rec­tor Calder Hart for de­ci­sions tak­en un­der his watch.Ude­cott was sub­ject to a one-year probe by foren­sic in­ves­ti­ga­tor Bob Lindquist whose find­ings formed the ba­sis of pre-ac­tion pro­to­col let­ter is­sued to Hart by at­tor­ney Christlyn Moore, on be­half of the com­pa­ny, on Mon­day.The ac­tion was of­fi­cial­ly an­nounced by Prime Min­is­ter Kam­la Per­sad-Bisses­sar in her con­tri­bu­tion to the 2012 bud­get de­bate last Mon­day.The pre-ac­tion pro­to­col nar­rowed Lindquist's ex­ten­sive sub­ject mat­ter in­to two ar­eas: Hart's role in the award of the Bri­an Lara Crick­et Acad­e­my (BLCA) pack­age to Hafeez Kara­math Ltd (HKL) in 2006 and his breach of "good faith by de­lib­er­ate­ly and im­prop­er­ly con­ceal­ing from your fel­low di­rec­tors and the Ude­cott share­hold­ers" his fam­i­ly con­nec­tions in Sun­way Con­struc­tion Ltd.Hart's pre-ac­tion let­ter is one of a string of civ­il pro­ceed­ings be­ing pur­sued by the Peo­ple's Part­ner­ship against for­mer di­rec­tors of state boards un­der the PNM ad­min­is­tra­tion.

Hart and Hafeez Kara­mathLtd

In its le­gal let­ter, Ude­cott as­serts the two caps Hart wore-that of ex­ec­u­tive chair­man and chair­man of the ten­ders com­mit­tee-gave him priv­i­leged ac­cess to in­for­ma­tion, in par­tic­u­lar, the fi­nan­cial health of HKL.The pre-ac­tion let­ter fur­ther states that Hart's knowl­edge would have been gained from a 2002 re­port ti­tled "Eval­u­a­tion of Bids Sub­mis­sions for the Cus­toms and Ex­cise Head Of­fice: Third Re­port" which out­lined HKL's un­sat­is­fac­to­ry fi­nan­cial po­si­tion re­sult­ing in a failed bid for the $97 mil­lion project."Your knowl­edge of HKL's fi­nan­cial po­si­tion with re­spect to its bid on the Cus­toms and Ex­cise Build­ing would have made you aware of its in­abil­i­ty to man­age projects in ex­cess of $100 mil­lion," the let­ter said."With re­spect to HKL's bid, the re­port con­clud­ed that the fi­nan­cial state­ments of the com­pa­ny did not qual­i­fy it for a project of this mag­ni­tude. Sec­ond­ly, the re­port iden­ti­fied that the fact that HKL which was on­ly in­cor­po­rat­ed in 2000 would au­to­mat­i­cal­ly dis­qual­i­fy the com­pa­ny as it would have not met the ten­der re­quire­ment of hav­ing to pro­vide five years of fi­nan­cial state­ments," the let­ter con­tin­ued.

It al­so con­tends that Hart's knowl­edge of HKL's fi­nan­cial po­si­tion was en­hanced by ad­vice pro­vid­ed by Ude­cott's ex­ter­nal coun­sel De­broah Peake, SC, which fo­cused on the is­sue of cap­i­tal ero­sion of HKL and its im­pli­ca­tion to the Cus­toms and Ex­cise bid process.Ude­cott con­tends Hart's bias to­ward the HKL group of com­pa­nies led oth­er ten­der­ers to threat­en le­gal ac­tion which re­sult­ed in a scrap­ping of that bid process and re-start­ing afresh by pre-qual­i­fy­ing con­trac­tors.The let­ter states that Hart chose to dis­re­gard the ad­vice of the project man­agers Turn­er Al­pa Ltd and project ar­chi­tects De­sign Col­lab­o­ra­tive As­so­ciates Ltd that the pre-qual­i­fi­ca­tion be done by them to en­sure the com­pe­tence of the com­pa­nies bid­ding.The pre-qual­i­fi­ca­tion re­port of Ri­car­do O'Brien in­di­cat­ed that all oth­er bid­ders ex­cept HKL had scored above the re­quired amount."You would have been aware from the Third Re­port of the Eval­u­a­tion Com­mit­tee that HKL could pro­vide lit­tle se­cu­ri­ty to se­cure an award of any con­tract in ex­cess of $100 mil­lion as the re­port had in­di­cat­ed that the De­sal­cott shares were mort­gaged twice over.

Your knowl­edge of the fi­nan­cial po­si­tion of HKL and the HKL group of com­pa­nies was aug­ment­ed by HKL's bid on the Min­istry of Le­gal Af­fairs Tow­er. From the bid doc­u­ments sub­mit­ted by HKL you would have been aware that the share­hold­ers eq­ui­ty of HKL was mere­ly $4.7 mil­lion. Fur­ther, the doc­u­ments showed that Hafeez Kara­math Group re­port­ed a share­hold­er deficit as at June 30, 2003, of $80.4 mil­lion. A re­sponse to a re­quest from the Ten­ders Com­mit­tee for HKL to pro­vide "let­ters from fi­nan­cial in­sti­tu­tions ad­vis­ing of HKL's to­tal line of cred­it, cur­rent com­mit­ments and avail­able line of cred­it was met with no re­sponse by HKL," the let­ter stat­ed.

Ude­cott al­leges that by the time HKL made its bid for Pack­age 2 on the BLCA in March 2006 and its bid for Pack­ages 2,3 and 5-8 in Sep­tem­ber 2006, Hart would have been aware of the fol­low­ing mat­ters with re­gard to HKL:

(i) that it had min­i­mal amounts of work­ing cap­i­tal, and neg­a­tive amounts of share­hold­ers' eq­ui­ty.

(ii) that the HKG was in a "grave­ly in­sol­vent" fi­nan­cial po­si­tion

(iii) that the sup­posed se­cu­ri­ty pro­vid­ed by the De­sal­cott share­hold­ing was il­lu­so­ry

(iv) that, notwith­stand­ing its lack of as­sets, HKL had been pre-qual­i­fied in re­spect of bids of up to $100 mil­lion.

"Added to the fore­go­ing was the fact that in June of 2006, pri­or to the award of Pk 2 and 2,3 and 5-8 Hafeez Kara­math was ar­rest­ed and charged with con­spir­a­cy to de­fraud De­sal­cott. This is a mat­ter which seems to have caused you lit­tle or no con­cern," the let­ter said.It not­ed that none of these mat­ters were brought to the at­ten­tion of the "board of di­rec­tors which you chaired or the eval­u­a­tions com­mit­tee which you al­so chaired when HKL was award­ed Pk 2 and Pk 2,3 and 5-8."This amount­ed to mis­rep­re­sen­ta­tion to the board as well as breach of your com­mon law and statu­to­ry fidu­cia­ry du­ty to­wards the claimant (Ude­cott). It is in­com­pre­hen­si­ble that HKL could have been award­ed Pk 2 and 2,3 and 5-8 by the claimant if the board was made aware of the fact," the let­ter ob­served.The let­ter ob­served that Hart and Ude­cott's board ap­proved an ad­vance pay­ment of $24.9 mil­lion to HKL sup­port­ed by a bond from Bankers In­sur­ance Ltd and fur­ther ap­proved an­oth­er pay­ment of $54.9 mil­lion, al­so sup­port­ed by a bond for Pack­ages 2,3,5-8.

"It is the po­si­tion of the claimant that in ap­prov­ing both of these ad­vanced pay­ment you breached your du­ty of care to the claimant. As of now, HKL owes over $73 mil­lion on ad­vance pay­ments. By April 2009 the bonds were al­lowed to ex­pire and the claimant has no se­cu­ri­ty for these ad­vance pay­ment debts of HKL. A pru­dent di­rec­tor in your po­si­tion would have en­sured that the ad­vanced pay­ments made to HKL by the claimant were prop­er­ly se­cured. This you failed to en­sure," the let­ter stat­ed.The let­ter charged that Hart "im­prop­er­ly or false­ly claimed" that he was not a mem­ber of the ten­ders com­mit­tee in cross-ex­am­i­na­tion dur­ing the Uff Com­mis­sion of In­quiry in­to the Con­struc­tion Sec­tor when at the time he was chair­man of the said com­mit­tee.Ude­cott is seek­ing a court or­der that Hart pay, by eq­ui­table com­pen­sa­tion, the de­lay by HKL on the BLCA as well as the ad­vanced pay­ments ap­proved to the sum of $73,446,905.08

Hart and Sun­con...lat­er Sun­way

Ude­cott is al­so seek­ing pay­ment as well as de­clara­to­ry re­lief from the court for Hart's role which led to the con­struc­tion of the Min­istry of Le­gal Af­fairs Tow­er in the sum of $369 mil­lion to Sun­way Con­struc­tion Ltd in April 2005.The let­ter al­leges that: "In Oc­to­ber 25, 2004 Sun­con de­liv­ered "by hand" to you a three-inch binder of pre-qual­i­fi­ca­tion doc­u­ments in the name of Sun­con, specif­i­cal­ly pre­pared in a pro­fes­sion­al man­ner for Ude­cott. There was a cov­er­ing note which read: "Thank you very much for the in­vi­ta­tion." In­vi­ta­tions to ten­der for the MLA were is­sued on No­vem­ber 10, 2004.It con­tend­ed that pri­or to this ten­der process, Sun­con had no con­nec­tion with Trinidad but one month be­fore the MLA ten­der process, in Oc­to­ber 2004, Sun­con set up a lo­cal Trinidad com­pa­ny, CHDC. It lat­er changed to Sun­way.The let­ter stat­ed that Hart "hand­ed" the Sun­con binder to Mr Agard (Ude­cott's then chief ex­ec­u­tive)."It was lat­er dis­cov­ered that there were a num­ber of im­por­tant con­nec­tions be­tween Sun­con's sub­sidiary com­pa­ny, CHDC, and your fam­i­ly.

These are as fol­lows:-

(i) the in­cor­po­rat­ing di­rec­tors of CHDC are Lee Hup Ming (Allen) and Ng Chin Pok (David), who are re­spec­tive­ly the broth­er and broth­er-in-law of your wife.

(ii) CHDC's let­ter­head ad­dress, 7 The Park, Glen­coe (an ad­dress re­peat­ed­ly used in cor­re­spon­dence) was the ad­dress of Chun Sing Kwok, who was a friend of your wife.

(iii) CHDC let­ter­head phone num­ber (re­peat­ed­ly used) was the phone num­ber of Chun Sing Kwok.

(iv) Par­tic­u­lar­ly sig­nif­i­cant was the fact that CHDC let­ter­head and fax num­ber 868-624-8239 was reg­is­tered in your name, and had been in­stalled since May 1987, at your Cas­cade home. There was re­peat­ed us­age of that fax num­ber in con­nec­tion with the ten­der­ing process. Even the for­mal ten­der doc­u­ment sub­mit­ted by Sun­con/ CHDC on Jan­u­ary 31, 2005 for MLA Pk 6 was on a CHDC let­ter­head which in­clud­ed the above phone num­ber, ad­dress and fax num­ber.

(v) Ad­di­tion­al­ly, CHDC di­rec­tor Ng Chin Poh (your wife's broth­er-in-law) vis­it­ed Ude­cott premis­es in Oc­to­ber and No­vem­ber 2004 to pick up the ten­der pack­age at Ude­cott, and al­so at­tend­ed in mid-De­cem­ber 2004 to pick up bul­letins for Pk 6."

Ude­cott as­serts that Hart breached his du­ty to act in good faith as well his fidu­cia­ry du­ty to­wards the com­pa­ny.Fur­ther, he failed to dis­close these mat­ters to the board of di­rec­tors or the ten­ders com­mit­tee. "In­deed, Mr Agard, the then CEO, stat­ed that he had no knowl­edge of any of these re­la­tion­ships. You sought to com­pound your dis­hon­esty and im­prop­er ac­tions in your ev­i­dence to the UFF Com­mis­sion of In­quiry when you stat­ed in your writ­ten state­ment of Jan­u­ary 14, 2009: "I take this op­por­tu­ni­ty to cat­e­gor­i­cal­ly re­fute and con­demn as false and mis­chie­vous any al­le­ga­tions that I have any fam­i­ly con­nec­tions with Sun­way or CHDC."Ude­cott con­tends that un­less an ac­cept­able agree­ment can be reached, it will com­mence le­gal pro­ceed­ings.