Medical Associates sues former CEO
McPherse Thompson, Assistant Editor - Business
Medical Associa-tes Limited, the hol-ding company for Kingston's privately owned Medical Associates Hospital, has taken legal action against its former chief executive officer, Simone Khouri, seeking to recover around $30 million and other damages.
The suit was filed in the Supreme Court by Medical Associates and related company Medical Xray Institute Limited, both with registered offices at Tangerine Place in Kingston.
The claim against Khouri, who is from Norbrook, was published in the press on Monday, on the order of the court.
Representatives of Medical Associates told Wednesday Business that the former CEO cannot be found. The claim was ordered served by way of its publication in the press, said Medical Associate's lawyer Walter Scott, QC, after failed efforts to locate Khouri. Efforts by Wednesday Business to make contact with Khouri for comment were also unsuccessful.
Scott says, given the circumstances, it's unclear when the matter will eventually be heard in court.
The hospital is owned by Michael Lee-Chin and is part of the Portland Holdings group. It was acquired in 2006 and remains the only health care asset in Portland's portfolio, as depicted by the holding company's website.
According to the claim filed by Scott, Khouri was appointed CEO in 2006, four years after joining the hospital as its administrator. She reportedly resigned as CEO on January 31, 2008, but was given back the job on August 7, 2012 with a monthly salary of $500,000, in addition to a uniform allowance of $120,000, for the contract period which was not specified. She was also appointed a director of Medical Associates.
The lawsuit, however, refe-rences a disclosure made in June 2012 by an employee of Medical Associates, for which no details were provided, but was said to be made under the Protected Disclosures Act. The Act encourages and facilitates the making of specified disclosures of improper conduct.
In May 2013, Medical Asso-ciates contracted chartered accountants Lee Clarke Chang to conduct a forensic audit of the companies, covering the near five-month period from January 1 to May 16, 2013.
Medical Associates alleges that human resource manager Verona Wood, acting on the directives of and in concert with Khouri, and without seeking approval from the board, issued a letter dated February 4, 2013, adjusting Khouri's salary package.
The CEO's salary was expre-ssed as $500,000 basic salary, and purported to grant monthly payments to Khouri of $120,000 as laundry allowance, $100,000 for lunch, expense of $225,000, travel of $180,000, and uniform of $400,000.
It effectively increased Khouri's monthly salary package by $1 million more, or an additional $12.86 million more in annual salary, the company said, and not the $500,000 monthly salary agreed.
The lawsuit alleges a breach of fiduciary duty and breach of implied terms of her contract. Medical Associates said, among other things, that Khouri obtained unauthorised reimbursements for travel expenditure from the company's bank account and used the bank account to purchase items for her own use or to the use of persons connected to her - deri-ving a benefit, the company claims, of $929,560.81.
Medical Associates further said that Wood, acting on Khouri's direction, issued a letter, also dated February 4, 2013, appointing Khouri managing director of Medical Xray Institute, with a basic salary of $4.2 million.
Along with the letter, was a salary sheet detailing monthly payments of a basic salary of 300,000, rent of $200,000, lunch $50,000, expense $50,000, travel $75,000, and uniform of $200,000.
It gave Khouri $11.9 million in excess of her salary allotment, the claim alleges.
The company also claims that Khouri used the National Com-mercial Bank credit card issued to Medical Xray Institute and converted money totalling $1.949 million and US$17,704.36 for her own use.
Khouri was confronted and dismissed on May 15, 2014, the lawsuit said.
In the claim, signed by acting chief executive officer Dr Michael Banbury, the companies said they have been greatly injured in their business and have been put to considerable trouble and inconvenience and expense and have suffered loss and damage.
The companies have claimed against Khouri, special damages of $27.68 million and US$17,704.36, as well as damages for conspiracy to cheat, defraud and injure the companies; for unjust enrichment; breach of trust and confidence; and breach of fiduciary duty.