Obviously, the Outameni purchase was a political, NOT financial, decision.
Nobody in their right financial mind would spend their money to buy a multicoloured elephant built on an illusory foundation that the average white American gives a hoot about our black history (especially 'the white man's' exploitation of slaves) and which has haemorrhaged cash from Day One.
The Gleaner reported (November 7): "Minutes of the NHT board meeting dated March 14, 2013 confirmed … the transaction emerged out of a political decision after tourism interests on both sides … prevailed upon Government to rescue the privately owned facility ... .
"NHT purchased the property despite technical evaluations by its Construction & Development Department [that] it didn't appear to facilitate the Trust's mandate ... and was more suited for a recreational heritage-type facility ... .
"Notwithstanding the department's findings, NHT Chairman Easton Douglas announced during the meeting 'the board has already taken a decision'."
It took National Housing Trust's (NHT) board six hours on Monday to conclude Outameni was a proper purchase (so what decision was "already taken"?), and possibly its "best buy ever," according to Percival LaTouche. Lambert Brown alleged critics were stupid and/or politically malicious because NHT bought only land, NOT a tourist attraction. Yet, Chairman Douglas earlier defended the purchase on RJR and Nationwide arguing Trelawny had enough housing solutions. Promoting NHT's "holistic approach" (October 31), he said: "When you look at ... development in Trelawny, it's a whole lot of housing; so what we're doing is to engage in community development, providing a combination of facilities and a mix of uses that'll contribute to the development of our human resources."
DIDN'T BUY ATTRACTION?
On Nationwide, Douglas predicted the project would be profitable in three years. On September 1, 2013, NHT acting Managing Director Martin Miller, in a presentation to the board asking for another $20 million to buy intellectual property rights, wrote that the board in December 2012 "approved the acquisition of the property based on a going concern". Yet Lambert now says NHT didn't buy a tourist attraction. Ugh!
Lambert didn't stop there. Brandishing two Outameni valuations, he argued NHT paid $180 million for property valued at more than $300 million (forced sale, $224 million). Like Michael Jordan, unbelievaBULL. Valuations are academic exercises based on sales of like properties in the area. Accordingly, these valuations are grand, useless guesstimates without willing vendors and purchasers. Lambert's triumphant assertion he could sell Outameni now for $224 million is utter, embarrassing rubbish. Sell it, nuh.
Lambert, huffing and puffing, won't trump reason. Shouting won't prevent us from listening. Dismissing any of your employers, Jamaican taxpayers, as stupid for not accepting anticipated capital gain is "profit" only exposes a veneer masking contempt for us. These are signs of pathetic buffoonery.
The PM regurgitated Lambert's explanations in Parliament on Tuesday. Despite insisting only land was purchased, she said a feasibility study was to be conducted on operating "Outameni Experience". She coudn't say NHT would build houses on the land. So why buy?
Asserting that spending at least $180 million on a wild goose chase "saved" $40 million is like Blondie telling Dagwood how much she "saved" at a sale but, when Dagwood checks his wallet, it's empty.
Directors Percy 'Best Buy' LaTouche and Lambert Brown babbled on about the NHT Act, Section 4(2). But Section 4(2) doesn't set out NHT's functions, only powers used to carry out its functions. NHT's functions are [Section 4(1)]:
" (a) to add to and improve the existing supply of housing by
(i) promoting housing projects to such extent as may from time to time be approved by the minister;
(ii) making available to such contributors ... loans to assist in the purchase, building, maintenance, repair or improvement of houses; and
(iii) encouraging and stimulating improved methods of production of houses;
(b) to enhance the usefulness of the funds of the Trust by promoting greater efficiency in the housing sector."
The PM also quoted from Section 4(2) (without identifying her source) as if powers therein contained were functions. She said:
"The act also allows the Trust:
To provide finance for social services and physical infrastructure for COMMUNITIES DEVELOPED UNDER THE PROJECTS (my emphasis);
To administer and invest the money of the Trust."
The PM neglected to mention the words she quoted are governed by the umbrella words:
"In the exercise of its functions, the Trust shall have power ... ."
No amount of smoke and mirrors can cloud the fact that these powers are only used "in the exercise of [NHT's] functions" (limited to building houses/promoting housing sector efficiency). If NHT develops a housing project, social services, etc., can be provided FOR THAT PROJECT. Unless investment is for the purpose of housing development/housing sector efficiency, it's ultra vires.
VEERING FROM VISION
Neither of Chairman Douglas' plans for "community development" or to "contribute to the development of our human resources" is permitted by the act. Government's community development agency is the SDC. For the protection of heritage, there's National Heritage Trust and the CHASE Fund.
C'mon, man! This isn't what Michael Manley and Edward Seaga agreed to create. This is a barefaced, callous, politically motivated abuse of trust whereby the NHT Act provisions have been swept aside as nuisances.
Once again, our public servants have retreated to political obfuscation as the preferred accountability-avoidance tool so we're left to our own devices to unravel how and why we're being screwed. To that end, the overriding principle to be applied is Goodman's Law. Remember Goodman's Law? Don't ask if it's about the money. It's ALWAYS about the money
Let's try following the money. Outameni mortgagee, Capital and Credit Merchant Bank (CCMB), formerly of Capital and Credit Financial Group (CCFG), sold to NHT. The PM carefully named the current board of CCMB, but former majority shareholder, chairman, group president and co-founder, Ryland Campbell, was Johnny-on-the-spot when the loan, which quickly became a very bad one, was made.
In 2012, CCFG imploded (too many bad debts) and was acquired by Jamaica Money Market Brokers (JMMB). The Gleaner reported (April 27, 2012, 'Ryland gavels his last AGM'):
"JMMB is acquiring CCFG at J$4.55 per share in a ... deal valued at J$4.22 billion ... .
"The CCFG shares are trading at J$4.64, [so] the offer ... undervalues the stock by two per cent. JMMB shares are trading above J$10 or double the [CCFG stock] price ... .
"The agreement JMMB has with Campbell and other big shareholders will give JMMB 81% of [CCFG] ... . The deal ends Campbell's 18-year control of a company he built from the ground up."
So, JMMB swallowed CCFG by paying 2% below market to, The Gleaner reports, "create a powerhouse with assets of J$153 billion, 188,000 client base and J$180 billion in funds under management". Did CCFG's bad debt portfolio figure? Suppose the bad debts were collected? What then?
The Gleaner reported (August 17, 2012; 'JMMB scores big on takeover'):
"JMMB closed its June first-quarter flush with cash and doubled its profit to J$2 billion on gains from its takeover of ... CCFG.
"JMMB made a J$1.57-billion gain on the acquisition, [having bought] J$6.05 billion fair value of CCFG net assets [for] J$4.11 billion, plus professional fees.
"The current size of [CCFG's] bad debt portfolio wasn't disclosed ... . For its year ending December 2011, [CCFG] had J$3.2 billion in non-performing loans ... .
"Last month [July 2012], JMMB ... [said] two-thirds of the bad debts were transferred to ... a related shell company that would manage the sale of the assets underlying the bad loans over a two-year period.
"As part of the acquisition deal, CCFG's shareholders, Ryland Campbell, Andrew Cocking and Gregory Shirley, committed to collect up to J$1.5 billion or half of the bad loans held by [CCMB]; or otherwise lose up to 50 cents per share of the J$4.55 per share paid by JMMB ... ."
Within five months (December 2012), NHT's board approved the purchase of Outameni (after zero bids at auction). The money was paid in March 2013. This must be a track record for concluding a Jamaican conveyancing transaction. NHT found out in August 2013 that, in the rush, it failed to secure necessary intellectual property rights. If any 'feasibility study' is to make sense, NHT must pay another $20 million to an associated Canadian company seemingly safe from CCMB's clutches.
Oh, what a tangled web ... .
Good news: Ryland landed on his feet. In April 2014, Omar Davies announced Ryland Campbell's appointment as new toll regulator. CCMB/CCFG's loss is PNP Government's gain.
Peace and love.
Gordon Robinson is an attorney-at-law. Email feedback to email@example.com.