Sun | Mar 29, 2020

Petcom heading to court in relation to seizure of gas cylinders

Published:Sunday | January 5, 2020 | 12:20 AMNeville Graham - Business Reporter
The Supreme Court in Kingston.

Attorneys representing petroleum marketing company Petcom say they are headed to the courts in the aftermath of a large find of cooking gas cylinders belonging to the three largest distributors of liquid petroleum gas (LPG) or cooking gas.

Sean Kinghorn of the firm Kinghorn and Kinghorn says he will be seeking to protect his client’s interest as he approaches the courts to claim damages and to prevent marketing company Yaadman Gas from, as he put it, ‘doing further harm.’

A contingent of police drawn from the Major Organised Crime and Anti-Corruption Agency (MOCA) and divisions in St. Elizabeth swooped down on the Malvern, St Elizabeth, base of Yaadman and seized 1,160 cooking gas cylinders belonging to marketing companies Gas Pro, IGL, and Petcom last weekend. This has left Yaadman Gas CEO Miguel Smith fuming. He says the presence of the cylinders in Malvern is part of normal business and that the decision to raid the Yaadman base was heavy-handed and need not have involved the police.

“Of course, they (LPG marketing companies) were right to go in because it is their cylinders, but let us be clear, when I have cylinders, I call and ask them to come in when it reaches a certain stage, and they’ve been pretty much doing that over time even up to recently,” Smith said.

Yaadman Gas just completed its first year as a player in the competitive LPG retail market.

It partnered with GB Energy, owners of the Texaco brand in Jamaica, to market 30-lbs and 100-lbs cooking gas cylinders in Jamaica using filling stations in Malvern and Montego Bay, St James.

Attorney for Petcom, Sean Kinghorn has pointed to an April 10, 2019 letter which forbade Yaadman to have anything to do with Petcom cylinders. “We wish to put clearly on record that the Petroleum Company of Jamaica Limited has no arrangement with you for you to handle or be in possession of its cylinders. Consequently, by so doing, you are trespassing upon our client’s property,’ read the letter from Kinghorn.

Smith has acknowledged receipt of the letter, going further to say that at least one other company had given a warning but that he could not prevent retailers and end-users from returning competitors’ cylinders as they switched to Yaadman Gas.

“It is not only Kinghorn that sent us letters, but also IGL and my reply to them was simply to ask: ‘These cylinders are coming to me (from retailers). What must I do with them?’ The fact is that the cylinders are there, and when I see them, I call them to come and collect,” Smith said, adding that marketing company GB Energy had reached out to the major marketing companies to hammer out a formal arrangement.

“GB energy is our partner, and I know that Mauricio (Pulido) when he was general manager reached out to them, but this was to no avail. What they are trying to do is to keep us out of the market,” Smith charged.

Present General Manager, Bela Szabo, confirmed the approach when contacted, saying that only one company engaged with GB Energy.

“Cylinder exchange is a normal practice in the market, and we have requested that the three of them meet with us to discuss the exchange protocol, but only IGL responded saying they were not interested in discussing the matter,” Szabo told the Financial Gleaner.

The attorney for Petcom says that as far as he is concerned, ‘there is an irregularity with regards to how Mr. Smith and Yaadman operate.’ Kinghorn says this is not what the industry is about nor what it teaches or what it expects.

Kinghorn further charges that the find of the cylinders strikes at the heart of the ability of the companies to earn revenue, especially in the St Elizabeth area. He says he will be arguing in court that the number of cylinders at Yaadman’s base is serving to restrict Petcom’s trade in the LPG business.

“If Yaadman holds on to the assets then it will affect the companies and ultimately the consumers because they will not benefit because one company will have the benefit of setting prices with no competition,” Kinghorn said.

The police raided the Malvern base of Yaadman after serving a search warrant. The location is said to be Smith’s local home. Reports indicate that Smith was not present when the police executed the warrant. Contacted by the Financial Gleaner Smith said that at the time of the raid, he was in the United States of America with his family.

“I came up on the 17th December 2019 because this is, basically, where my family lives since my son is autistic. Clearly, this being Christmas, I wouldn’t want to be away from them. It is, therefore, unfortunate that it should happen at this time,” Smith said, insisting that he does not want anyone to feel that he was conveniently absent.

He says he expects to be back in Jamaica shortly to address all outstanding matters while his legal team puts things in place. Contacted, attorney normally representing Smith, Hugh Small, said he is declining comment at this time as he does not have a full brief from Smith.