DH | Prosecutor’s Office persists in request for harbour inquiry

~ Court to decide February 2019 ~ | Daily Herald

PHILIPSBURG–The Joint Court of Justice will give its decision on the Prosecutor’s Office’s request for a civil inquiry into the state of affairs within the Port of St. Maarten before or on February 22, 2019, at the latest, the Court said Thursday.

The Prosecutor’s Office had filed the request for an inquiry August 31, 2017. In June 2018, the Court granted the harbour and the Prosecutor’s Office until yesterday, December 13, to discuss whether the objections raised by the Port against a civil inquiry – concerning the cost and time involved – may be alleviated. Furthermore, parties could further discuss the scope and timing of a possible inquiry. The Prosecutor’s Office, the Port and Country St. Maarten also presented a second round of pleadings on Thursday.

In an intermediate ruling of June 14, the Joint Court already indicated there was sufficient reason to doubt the correctness of policies within St. Maarten Harbour Holding Company NV (SMHHC). Based on information gathered thus far, the Prosecutor’s Office also has reason to doubt a correct policy within the port, the Solicitor-General said in addressing the Court.

During the investigation, the Prosecutor’s Office requested documents and interviewed those involved. The Executive and Supervisory Boards were also asked to respond.

This is not a criminal but a civil investigation into possible mismanagement. The law gives the Prosecutor the authority to request that the Court launch such an investigation in the interest of the public.

“The Prosecutor’s Office wants to make the company less vulnerable for undermining [crimes – Ed.] and fraud and the Prosecutor’s Office wants to make the company transparent and financially healthy so that the port can face the future in a sustainable way. The Prosecutor’s Office does not have the ambition to bulldozer the company. What the Prosecutor’s Office is doing is taking its legal responsibility which arises from the public interest.

“This means that also in the past months the Prosecutor’s Office has attempted to find out the real causes of the problem, together with the company, and then have the port itself take appropriate measures,” the Solicitor-General said. “Unfortunately, the Prosecutor’s Office has mainly encountered opposition.”

During the hearing, all parties were given the opportunity to present proposed measures to improve the situation at the port. In addition to the Prosecutor, these included representatives of the port administration, the Supervisory Board and Country St. Maarten, including minister of Tourism and Economic Affairs Stuart Johnson.

The Prosecutor’s Office wants a broad investigation into the harbour. “To show that there is good reason to assume that there is a disease, five symptoms have been mentioned,” the Solicitor-General said in referring to five points of investigation, including the tendering, financing and contracting of (infrastructural) harbour projects; the process of attracting loan capital; the entering into large and risky financial obligations; project development and the issuing of land; and corporate governance from January 1, 2009.

This concerns the company not abiding by the rules concerning corporate governance; the tender and development of the causeway bridge; the loan of Octavio Holdings Inc. for the purchase of a crane; the dispute between SMHHC and developer Zebec Development NV and the subsequent settlement concerning a plot of land adjacent to the port; and fraud committed at the harbour which is subject of the so-called “Emerald” investigation.

According to the Solicitor-General, the harbour is guilty of “window dressing” and “symptom” control. The port only aims its arrows at the five “symptoms” mentioned, and makes believe as if everything that needs to be done has been done, he said in pointing out that the compliance officer does not receive substantive research assignments and allegedly has been misled by incorrect information.

Port management had stated earlier that it had the intention to launch its own investigation – a “baseline study” (“nulmeting),” and was prepared to provide additional information to the Prosecutor’s Office, especially where the causeway bridge project is concerned. However, the Solicitor-General said that nothing has come of the announced baseline study.

In response to the Prosecutor’s allegations the port has instituted a Know-Your-Counterparty (KYC) Procedure which applies to loans derived from private companies, other than banks, trade creditors or cruise lines. According the port, no such loans were taken after 2009, “nor is it expected that such loan will be taken in the foreseeable future.”

However, according to the Prosecutor’s Office, it emerged from the annual accounts 2015 and 2016 that a loan was taken from Corplease “under conditional sale of land” for US $2.5 million. Corplease is a partnership of the Atlantis Group owned by Francesco Corallo.

“This could mean two things: either the harbour did not follow its own KYC procedure to find out who is Corplease’s ultimate beneficial owner, or they did, but did not attach any consequences, because while everybody in St. Maarten knew that Corallo had in the meantime spent time in jail under suspicion of multi-million fraud in Italy, the port extended the loan in March 2018,” the Solicitor-General stated.

The port acknowledges that things have gone wrong and admits that it has no insight into the extent of these errors and shortcomings, and that it is not able to investigate these, the Solicitor-General said, because it wants to spend its time and money on the port’s recovery. According to the Prosecutor’s Office, this case is the opportunity for the port’s recovery, as three independent experts would be given the opportunity to map the good and weak spots and to design measures to protect the port against similar problems in the future.

“Cooperating in such a survey would also enable the port to show Country St. Maarten, its investors and its predominantly American customers that they are serious about transparency, integrity and healthy business operations,” the Solicitor-General said.

Instead, the Supervisory Board warned shareholder Country St. Maarten by letter of October 27 that an inquiry could lead to the Prosecutor’s Office being granted “extraordinary powers in the management, Statutory Board of Directors (SBOD) and putting aside all powers of the Shareholder (namely Country St. Maarten).”

According to the Prosecution, there is no port entity that takes its responsibility for sound, ethical and transparent business management seriously. The board is mainly busy to keep an inquiry outside the door. The Supervisory Board holds the shareholder hostage with the argument that the Prosecutor’s Office is “taking over.”

The shareholder has no longer said anything about the desired baseline study since the session in May. The shareholder’s only initiative concerns the attempt to erode supervision by requesting the resignation of the recently-appointed Supervisory Board members.

The Solicitor General said that in the harbour’s opinion, the weak business operations in recent years are partly due to the fraudulent and currently suspended Chief Executive Officer Mark Mingo and weak supervision within the company.

The Prosecution stated that information gathered to date revealed that the port has been used “several times to represent both political and personal interests … which are not always in line with the interests of the company. Partly because of this, the port is currently in a difficult financial situation.

“What real measures has the port taken to prevent the port from being used in the future for political or personal interests that damage the company? What guarantee does the St. Maarten society have that the defects found will not be repeated in the future, as long as the underlying ailment is left alone? What guarantee do the people of St. Maarten have to take advantage of the country’s main source of income by receiving dividends in the state treasury?”

Despite several reports and advice, hardly anything has changed at the port, which led the Prosecutor’s Office to persist in its request for an inquiry “in the interest of the harbour’s future and in the interest of St. Maarten’s society.”

Bron: Daily Herald

Geef een reactie

Het e-mailadres wordt niet gepubliceerd. Vereiste velden zijn gemarkeerd met *