100-acres BK/BaiShanLin state lands at Providence…Bank paid off, developer starts work

Nov 19, 2017 News

---

A commercial bank is clashing with a City accountant who was appointed Receiver/Manager to oversee the sale of a 100-acre plot of prime lands at Providence, East Bank Demerara.

Last Monday, Citizens Bank Managing Director, Eton Chester, wrote, revoking the appointment of Receiver/Manager, Nigel Hinds, which took effect in January.
The Receiver/Manager is accusing the bank of forcing him to act contrary to the laws and of the bank being in a possible conflict of interest situation.
On the other hand, the bank is accusing the accountant of not acting in the interest of the bank as the Receiver/Manager.
The bank blocked attempts by Hinds to make payments from the special account that had been established.
Earlier this month, Hinds wrote to the Governor of Bank of Guyana, Dr. Gobind Ganga, who is the regulator of financial institutions, complaining about the interference of Citizens Bank.
At heart of the matter is the 100-acre land in Providence known as Parcel 130, Block 111, Zone East Bank Demerara.
That land was sold to Sunset Lakes Inc, owned by contractor, Brian Tiwarie, in February 2014.
The Central Housing and Planning Authority (CH&PA) had held onto to the property for three years for Tiwarie before eventually selling it for $458M.
A few months later after he purchased it, Tiwarie turned around and sold Sunset Lakes to Chu Hongbo, the main principal of embattled Chinese company, BaiShanLin. The deal between Tiwarie and the Chinese investor was for US$8M ($1.6B) or almost four times what Tiwarie paid for the land.
The Chinese investor later approached Citizens Bank for financing, drawing down on a $1.1B debenture to create what was an ambitious gated community complete with community centre and all.
However, Sunset Lakes with the new Chinese owner, defaulted on the bank payments which was in excess of $9M per month.
At the end of October, the interest on that $1.1B saw the figure owed to Citizens Bank mounting.
Hinds placed public notices out for the interested parties to bid for the land.
Six bids came, including a $900M bid for 50 acres by Banks DIH, a sister company of Citizens Bank.
However, the Receiver/Manager settled for the highest bid for the entire property which came from Precious Metal Inc., owned by businessman Tamesh Jagmohan. That company made a bid for over $1B, just a little more than what was owed by Sunset Lakes to the bank.
The deal reportedly went through last month with the buyer paying the money and taking possession. Works have started. And these works coincided with Hinds’s troubles.
When Hinds attempted to have the funds transferred to Demerara Bank to an interest bearing account, Citizens Bank blocked the move, according to documents seen by this newspaper.
Hinds claimed that as Receiver/Manager, he is bound to protect the interests of all the parties.
In this case, with money just sitting in an account, he wrote all the banks asking for the best interest rates. Only Demerara Bank and the Guyana Bank For Trade and Industry responded.
Citizens Bank did not, despite the account and the monies being there.
In a letter dated November 13, Citizens Bank’s chief, Chester, objected to the decision to have the money transferred.
The banker said that Hinds’s conduct amounted to negligence and in effect increased Sunset Lakes’ indebtedness to the bank.
“A prudent receiver would have paid a significant amount of deposit to the debenture holder (the bank) in reduction of the company’s indebtedness and reduce the daily interest.”
The banker pointed to the caveats by a number of parties and claimed that Hinds did not inform Citizens Bank of them.
However, on Thursday, the Receiver/Manager, in his response copied to the Finance Minister, Bank of Guyana, lawyers and stakeholders, insisted that the revoking of his appointment is “illogical” and not supported by facts.
He said that under the regulations, he can deposit the money or proceeds to any bank.
“The Receiver/Manager has the absolute discretion to deposit and expend funds from the Receiver/Manager bank account, within the confines of the law as set out in the 1991 Companies Act.
“The Receiver/Manager’s bank account could be opened at any bank. The deposit of $750M from the deposit made by the purchaser, into an account at CBGI is not an obligation of the Receiver/Manager; the Receiver/Manager could just as well have deposited the $750M into any other bank.”
Hinds insisted he cannot use the deposit by Precious Metal Inc. to pay the loan as the buyer has not yet received title. That is a no-no.
Hinds defended handing over possession of lands to Precious Metal Inc. saying that is normal when more from 50 percent of the price has been paid.
“Based on the foregoing, it is obvious that there is no provision or clause in the Companies Act 1991 that justifies the revocation of my appointment as Receiver/Manager of Sunset Lakes Inc.”
In his complaint to the Bank of Guyana earlier this month about Citizens Bank, Hinds said that the blocking, denial and non-processing of cheques and bank draft by Citizens Bank prevented him from carrying out his obligations to the parties involved and “raises the hazards of conflicts of interest.”
Precious Metal has started works on the Providence property. Several stalled buildings, impressive edifices, have been sitting there idle with works to start soon on them.
The Central Housing and Planning Authority has reportedly visited the site. It has withdrawn its objections.
The particulars of the sale of the 100-acre plot by Sunset Lakes Inc. to Hongbo a few years ago had raised eyebrows.
From all indications, Sunset Lakes breached the agreement by selling the entire plot without building any homes.
How the developer under the Chinese was able to get away with the breaches would raise troubling questions about CH&PA’s monitoring of the housing projects during the reign of the previous PPP/C administration, especially as thousands of persons are on file awaiting house lots.
CH&PA is facing questions over its administration of the lands and other housing programmes.
Recently, it was disclosed that several close friends of the PPP/C administration benefitted from lands on the East Bank of Demerara.

---

---