Bulkan takes witness stand in Republic Bank breach of contract trial

Mar 30, 2018 News

Minister of Communities, Ronald Bulkan, took the stand Wednesday in the trial for which Republic Bank is being accused breaching an arrangement with Precision Woodworking Limited in relation to a defaulting loan dating back to 2011.
The Court action was filed in 2012 by Bulkan and his brother, Rustum Bulkan, in their capacity as Principals of Precision Woodworking Limited.
Precision Woodworking is accusing Republic Bank of unlawfully appointing a receiver to seize its assets even after the company reached an agreement with the bank to repay a non-performing loan.
The Woodworking Company had secured certain loans via Republic Bank but subsequently fell in arrears in the loan servicing. Republic Bank, as part of the process of recovering the loan, appointed a receiver to secure assets of Precision by way of notice of a Court Order in June 2011.

Minister of Communities, Ronald Bulkan

However, Precision Woodworking claims that it had already reached an agreement with Republic Bank to repay.
The company has been challenging the legality of the Bank’s receivership in Court since 2012. The trial got underway before Justice Navindra Singh at the High Court yesterday, with Bulkan taking the witness stand, and leading evidence.
In his evidence- in- chief, Bulkan told the Court that the company started experiencing financial difficulties in 2010.
As a result, the witness explained that the Republic Bank from which they had previously garnered loans was contacted regarding the difficulties the company was experiencing.
In response to questions by his attorney, Nigel Hughes, the witness alluded to correspondences forwarded to the Bank as it relates to the loans it had previously garnered from the institution.
He said that as a result, the letters were sent to the bank in May, June and July of 2011.
According to Bulkan, there were also subsequent meetings with officials of the Bank to discuss the difficulties, with which the company found itself.
One of the letters became the basis of objections raised by Attorney for Republic Bank, Robin Stoby, (S.C).
Stoby argued against admitting the letter as part of the evidence alleging that its contents could lead to hearsay material entering the trial.
The trial judge explained, however, that the letter was not being mentioned for its content but for fact that it existed.
Justice Singh elucidated that the fact that there was correspondence to Republic Bank bears relevance to the proceedings before the Court. He told the Attorney nonetheless that his objections were noted.
In continuing his testimony, Bulkan also pointed to another piece of correspondence, to Managing Director of Republic Bank at the time, John Alves.
He told the Court that he forwarded an email to Alves on June 24, 2011.
The businessman told the Court that in the email he informed the Bank of the company’s position as it relates to the sale of a property located at Lot 21 Ruimveldt Industrial Estate.
Bulkan told the Court that Precision had informed the bank of an offer by at least two entities for the purchase property under its control. He specified that both Neal and Massy and prominent businessman, Hareshnarine Sugrim, (‘Chinee’) had offered to purchase the properties under its control. The witness stated that Neal and Massy had made an offer for US$1.15 M for the purchase of the property.
In the statement of claim, Precision had noted that the Company engaged the bank on June 30, 2011 regarding the loans. The company had claimed that it repaid about $513M in full but the interest stood at some $327M.
As a result,the company’s indebtedness amounted to in excess of $406M.
The company is claiming that prior to engaging the Bank regarding an arrangement with Torginol Paints for the sale of properties at some $230M, the Bank was informed of its efforts to find another buyer.
The Bank, according to Precision had also received an initial $30M as part a first purchase from the buyer but later informed the company that Kashir Khan had been appointed as its receiver.
It is against this backdrop that Precision is claiming that it is unlawful to appoint a receiver after it had reached certain arrangements to repay the loan.
The trial was adjourned to April 17.

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