The State Assets Recovery Agency (SARA) has taken the principals of Queens Atlantic Investment Inc (QAII) to court and is asking the company to pay a differential on the price it paid for the old Sanata Textiles Complex and what SARA believes is its market value.
“We just received the papers from the court. No one contacted us or reached out to us at any time. So we have reached out to our lawyers for them to look at it,” Zulficar Ally, the Corporate Secretary of QAII told Stabroek News yesterday when contacted.
“The differentials that they are asking for, they are saying that there was a government valuation and [the price] that it was sold at was different from the government valuation and they would like the difference,” he added, but explained that since he did not have the document in front of him, he could not provide specific figures.
Ally would only say that “it is an exorbitant amount of money.” He said that before being served the court documents last Thursday, SARA “never called us, asked us to come or to meet with us.”
The company has been given one month to file a response and is engaging its lawyers, even as Ally stressed that the purchase will be proven to be above board when the matter comes up in court.
“We will do what we have to do to defend the company. We know we haven’t done anything wrong and I am pretty sure when it goes to the court, we will be vindicated,” he said.
Former Minister of Finance Dr Ashni Singh and former head of the National Industrial and Commercial Investments Limited (NICIL) Winston Brassington were last year charged with misconduct in public office in relation to the controversial sale.
The charge alleges that Singh, performing the duties of Minister of Finance and Chairman of NICIL, and Brassington, as CEO of NICIL, between October 26th, 2010 and December 20th, 2010 at Lot 126 Barrack Street, Kingston, Georgetown,
by way of agreement of sale and purchase, acted recklessly when they sold the
Sanata Textiles Complex with building and erections thereon, being 18.1871 acres, to QAII for $697,864,800 plus VAT, knowing that the said property was valued at the sum of $1,042,403, 500 and was therefore sold at a price that was grossly undervalued, thereby creating a breach of their duties.
The sale occurred under the Bharrat Jagdeo-led PPP/C government and faced immense scrutiny given the close link between the then president and QAII CEO Dr Ranjisinghi ‘Bobby’ Ramroop.
A 99-year lease had initially been granted to QAII for the development of printing, dyeing and textile operations at the Sanata complex.
However, the group eventually bought the complex in 2010.
Brassington, in 2008, had said that once QAII came good with its US$30 million investment in the complex, it was free to exercise the option to buy the property at a price of $700 million after three years. He had also said that the price quoted was the average valuation between that which government obtained from an independent valuator and one contracted by the investors.
The then government said that prior to the investment at Sanata, the annual upkeep costs in 2006 were almost $20 million: $8 million in security, $6 million in rates and taxes, and over $5 million in cleaning and miscellaneous repairs, including perimeter lighting. While parts of the complex had been rented out on short term leases, the fees collected were never sufficient to cover the upkeep.
The sale was hugely controversial and it was revealed that the PPP/C government granted duty-free concessions and tax waivers for hundreds of items including a printing press, five vehicles, three containers of building materials and equipment representing millions of US dollars to five QAII subsidiaries before it had even signed investment agreements with the company.
It was subsequently discovered that the concessions were approved despite not being in conformity with the tax laws of the country. The Jagdeo-led former government then amended the Income Tax (In Aid of Industry) Act to facilitate QAII retroactively benefitting from the concessions.
