There is mount­ing ev­i­dence that Telecom­mu­ni­ca­tions Ser­vices of Trinidad and To­ba­go (TSTT) grant­ed pref­er­en­tial con­trac­tu­al arrange­ments to Cell­Mas­ter in a re­la­tion­ship dat­ing back to 2011.

A con­tin­u­ing Guardian Me­dia in­ves­tiga­tive se­ries has un­earthed the deals, al­though the com­pa­ny con­tin­ues to de­fend Chief Ex­ec­u­tive Of­fi­cer Dr Ronald Wal­cott han­dling of the is­sue.

Af­ter ex­clu­sive re­ports by Guardian Me­dia over the past two days high­light­ed ev­i­dence of pref­er­en­tial treat­ment giv­en to Cell­Mas­ter and an­oth­er one owned by the same per­son, TSTT is­sued a state­ment on Fri­day say­ing it was the for­mer ex­ec­u­tive vice pres­i­dent Mo­bile Nicole Ker­ry LumKin who was re­spon­si­ble for the con­tin­u­a­tion of the deal.

LumKin raised the le­gal­i­ty of the Cell­Mas­ter deal in an in­ter­nal au­dit she did dur­ing her tenure, cit­ing sev­er­al breach­es of pol­i­cy in the award of the con­tract

But ac­cord­ing to an­oth­er re­sponse by TSTT last Wednes­day, their “records show that Dr Wal­cott was not the per­son who in­tro­duced Cell­Mas­ter or its prin­ci­ples to TSTT.”

How­ev­er, Guardian Me­dia re­ceived two new doc­u­ments from a whistle­blow­er that show links be­tween Wal­cott and Cell­Mas­ter even be­fore he be­came CEO.

Back in 2011 when Wal­cott was the head of Mo­bile Op­er­a­tions, Dis­tri­b­u­tion and Pre­paid Ser­vices, he ne­go­ti­at­ed a new deal for Cell­Mas­ter, mak­ing them a flag­ship deal­er for TSTT.

In a let­ter he penned dat­ed March 27, 2012, Wal­cott said that Cell­Mas­ter was un­der a new man­age­ment con­tract and the re­tail­er was be­ing paid a flat fee of $750,000 per month for their five stores.

“This agree­ment su­per­sedes the pre­vi­ous­ly es­tab­lished man­age­ment con­tract,” Wal­cott wrote back then.

“As a re­sult, retroac­tive pay­ment of $768,750 is ap­plic­a­ble in ac­cor­dance with the ef­fec­tive date of con­tract. Penal­ties and bonus­es will al­so ap­ply for sur­pass­ing or failed to achieve month­ly eval­u­a­tions and tar­gets.”

Doc­u­ments ob­tained by Guardian Me­dia show that the in­ter­nal au­dit de­part­ment in­ves­ti­gat­ed a $30 mil­lion deal be­tween Cell­Mas­ter and TSTT which was bro­kered by Wal­cott. Un­der scruti­ny, it was re­vealed that the deal breached sev­er­al breach­es of TSTT’s ex­ist­ing poli­cies on con­trac­tu­al agree­ments.

This deal was al­so sub­ject to an­oth­er in­ter­nal au­dit by for­mer in­ter­nal au­dit man­ag­er Mait­land Daniels, af­ter he (Daniels) re­ceived “whistle­blow­er cor­re­spon­dence” about sus­pi­cious mo­bile hand­set sales in May 2013.

In that re­port, Daniels im­me­di­ate­ly not­ed that the mas­ter con­tract be­tween TSTT and Cell­Mas­ter dif­fered from what Wal­cott had said pre­vi­ous­ly. Daniels point­ed out that al­though Wal­cott had said the $750,000 pay­ment was for all five out­lets, the mas­ter con­tract said that this mon­ey was paid for on­ly the Cell­Mas­ter store at City Gate, Port-of-Spain.

Daniels said in his re­port that he was al­so asked to in­ves­ti­gate a “sales trans­ac­tion of ap­prox­i­mate­ly $30 mil­lion be­tween Wal­cott’s Mo­bile Di­vi­sion and Cell­Mas­ter.”

“The sales trans­ac­tion was al­leged to be ‘man­u­fac­tured’ to il­le­git­i­mate­ly achieve the Mo­bile Di­vi­sion’s an­nu­al rev­enue/per­for­mance tar­gets for the year end­ing March 31, 2013 through its record­ing in the fi­nan­cials for the pe­ri­od,” Daniels said in the re­port.

What Daniels al­leged­ly un­cov­ered were sev­er­al breach­es of TSTT pol­i­cy by Wal­cott in or­der to fa­cil­i­tate a mega-mil­lion deal with Cell­Mas­ter.

“The agree­ment was for the pur­chase of 63,650 mo­bile phones with an es­ti­mat­ed val­ue of $30.6 mil­lion for aged stock held at CT Trinidad and To­ba­go on be­half of TSTT,” the re­port not­ed.

“When ques­tioned re­gard­ing the sale of such a large quan­ti­ty of mo­bile units to just one sup­pli­er in­stead of the full BMo­bile Chan­nel net­work, Wal­cott sug­gest­ed that Cell­Mas­ter’s suc­cess at ab­sorb­ing and mov­ing high in­vestor vol­umes and the fixed man­age­ment fee paid to this pre­mi­um part­ner in lieu of com­mis­sion on each sales unit (as with oth­er deal­ers) had in his view a proven and sub­stan­tial ben­e­fit to TSTT.”

Daniels al­so found that Cell­Mas­ter did not have a his­to­ry of mov­ing such a vol­ume of units in the past.

The re­port, how­ev­er, found that the deal was “le­git­i­mate in so far as it met all the cri­te­ria to be con­sid­ered as a prop­er ad­just­ment to the com­pa­ny’s rev­enue for the fis­cal pe­ri­od end­ed March 31, 2013.” But Daniels dug fur­ther and found “sig­nif­i­cant breach­es in the process” and de­scribed the agree­ment as “high­ly un­usu­al.”

“Mr Ronald Wal­cott ad­vised In­ter­nal Au­dit that the mas­ter con­tract be­tween TSTT and Cell­Mas­ter pro­vid­ed the re­quired de­tail to guide the terms un­der which the $31 mil­lion sale was ad­min­is­tered.

“How­ev­er, In­ter­nal Au­dit found that giv­en the val­ue of the sale, to mit­i­gate the un­di­ver­si­fied risk, ev­i­dence of in­sur­ance cov­er, terms of pay­ment and per­for­mance bonds should have been met­ed out and placed with­in the March 8, 2013 sales agree­ment since it rep­re­sent­ed a high­ly un­usu­al trans­ac­tion out­side the scope and am­bit of the mas­ter con­tract,” Daniels point­ed out in his re­port find­ings.

“Nei­ther ev­i­dence of the orig­i­nal per­for­mance bond, up to the cred­it lim­it ($1m) ap­peared to ex­ist,” Daniels not­ed.

Daniels al­so found that there were no copies of the Cell­Mas­ter in­sur­ance cov­er ren­dered along with the mas­ter agree­ment signed by TSTT and Cell­Mas­ter’s se­nior rep­re­sen­ta­tives.

Daniels, in dis­cus­sions with the head of rev­enue ac­count­ing, dis­cov­ered an­oth­er pol­i­cy breach, in that the rev­enue de­part­ment had “no knowl­edge” of the mega-mil­lion dol­lar sale. That lack of in­for­ma­tion “ran counter to the nor­mal pro­ce­dure/prac­tice usu­al­ly car­ried out by the Mo­bile Di­vi­sion,” he not­ed.

Fur­ther, Daniels in­ves­ti­gat­ed past deals from March 2011 to 2013 with Cell­Mas­ter and found no ev­i­dence to sug­gest it could han­dle the mas­sive vol­ume of phones re­quired. Daniels al­so found that this was an­oth­er breach of the TSTT mas­ter con­tract.

“Dur­ing that pe­ri­od, TSTT is­sued 199 in­voic­es for pur­chas­es made by Cell­Mas­ter to­talling $17.1 mil­lion at an over­all av­er­age of $86,000 per in­voice,” Daniels said.

He al­so found that TSTT ho­n­oured 106 cred­it notes to­talling $2.1 mil­lion.

“In­ter­nal Au­dit is of the view that the pur­chas­ing his­to­ry of Cell­Mas­ter with TSTT did not sug­gest that the com­pa­ny had the abil­i­ty to ab­sorb a cred­it pur­chase thir­ty times the $1 mil­lion cred­it lim­it,” Daniels wrote in his re­port.

At the time of the mul­ti-mil­lion dol­lar sale to Cell­Mas­ter, it was al­ready ow­ing TSTT $5.4 mil­lion in the ze­ro to 30-day cat­e­go­ry and an­oth­er $300,000 in the 31 to 60-day cat­e­go­ry.

“This moved to $1.6 mil­lion in the 0-30 day cat­e­go­ry and $4.9 mil­lion in the 31-60 day cat­e­go­ry re­spec­tive­ly by March 31, 2013,” Daniels said.

Daniels al­so dis­cov­ered that Wal­cott re­quest­ed and re­ceived a back­dat­ed let­ter to fit in­to the sales agree­ment se­quence.

The In­ter­nal Au­dit de­part­ment found no ev­i­dence of a re­ver­sal of the mas­sive pur­chase but saw an in­crease in the cred­it notes from Cell­Mas­ter and sug­gest­ed “con­tin­u­ous mon­i­tor­ing” of that sit­u­a­tion.

In his fi­nal analy­sis, Daniels found that there was mer­it in the al­le­ga­tions made by the whistle­blow­er. His opin­ion was that while all ap­peared well with the deal, there were anom­alies in the sup­port­ing doc­u­ments and that these were enough to “sug­gest and give strong cre­dence to the ap­pear­ance of im­pro­pri­ety on the part of the Ex­ec­u­tive Vice Pres­i­dent Mo­bile.”

“In­ter­nal Au­dit views with grave, deep and abid­ing con­cern the ap­pear­ance of such du­plic­i­ty and im­pro­pri­ety by the Ex­ec­u­tive Vice Pres­i­dent Mo­bile in the cir­cum­stances, since such ac­tions neg­a­tive­ly colour the over­all eth­i­cal cli­mate of the com­pa­ny,” Daniels wrote in the re­port.

“The cur­rent sta­tus is the poor debt ser­vic­ing by the deal­er, based on a cred­it state­ment as at May 15, 2013, threat­ens to push TSTT’s fi­nance de­part­ment in­to mak­ing a pro­vi­sion of $34.6 mil­lion based on the treat­ment of aged debt 90 days and over,” Daniels added.

“Whether an­tic­i­pat­ed or not, the ac­tions of the Ex­ec­u­tive Vice Pres­i­dent Mo­bile, in the view of In­ter­nal Au­dit, were ac­com­plished with­out due re­gard for the cas­cad­ing risks brought on by the ex­pe­di­ent sale to Cell­Mas­ter.”

Daniels al­so rec­om­mend­ed that dis­ci­pli­nary ac­tion be tak­en against Wal­cott.