Picture emerges of Puerto Bueno site’s rocky past
The ecologically sensitive Puerto Bueno Mountains on Jamaica’s north coast, the current focus of an environmental controversy, was the centre of two court disputes among eight parties up to September 2017, when the last case was withdrawn.
Claims of contractual default, fraud and conspiracy are threads interwoven in the cases, which give insight into the changing ownership of the 569-acre property over the last two decades and whose limestone deposits on 123 acres are set to be mined with expectations of $635 million in tax inflows and 100 jobs.
Environmentalists and residents of St Ann communities near the mountain are demanding that Prime Minister Andrew Holness restore the overridden decision of the state’s environmental watchdog, which expressed fear of “irreversible” environmental damage.
In May, the National Environment and Planning Agency denied the application for a permit by the St Lucia-registered Bengal Development Limited, the owners of the land who took over from Diamond Property Development Company Limited.
Bengal was bought in 2017 by the Florida-based Jamaica World LLC, whose managing partner Kashif Sweet has declined to discuss the history and ownership of the entities.
Documents obtained by The Sunday Gleaner are shedding some light, however.
The first court matter stemmed from a lawsuit filed by the family-run Surrey Paving and Aggregate Limited against Diamond Property Company Limited on September 26, 2008 for millions it claimed the latter owed.
In the second case brought on December 1, 2016, Diamond alleged fraud in asking the court for $12 billion in special damages. It withdrew the case against seven defendants – Surrey, Leslie Chang, Bengal Development, Paris Wick Parboosingh, DunnCox law firm, attorney Donovan C. Walker, and Allison Pitter & Co – in September 2017 after a “settlement” was brokered, sources say.
The Sunday Gleaner has been unable to obtain a copy of the defence filed by the parties Diamond sued, and some lawyers associated with the defendants declined to comment.
“They strongly rejected Diamond’s allegations,” the source said.
The late Vivian Blake, the reputed founder of the Shower Posse gang, which has deep historical links to the ruling Jamaica Labour Party, bought the property in question through his company, Diamond, in 1989 from Donovan and Dorothy Hopwood.
In 2002, at which time the company’s main principal was Vivian’s son, Duane, Diamond entered a lease agreement with Jose Cartellone Construcciones Civiles to mine limestone for the construction of the North Coast Highway.
Diamond was given the right to purchase mining equipment for US$2.4 million when the agreement expired on May 31, 2008, court documents said.
In 2007, Diamond contended that Surrey Paving, through directors Leslie Chang and Jamie Chang, approached Blake, proposing a mining lease, at which point Blake reportedly advised of his right to the equipment.
The Changs reportedly said the equipment would be “of great value” to Surrey and expressed an interest in acquiring them.
Diamond said the Surrey players recommended using the law firm DunnCox to prepare an agreement for Diamond to exercise its right to buy some pieces of Jose’s equipment on behalf of Surrey upon the provision of US$561,000.
Jose, however, insisted that its entire inventory had to be bought, and according to Diamond, Surrey agreed to the purchase in August 2008 at a cost of US$1.6 million.
That process later fell through after Jose reportedly refused to accept the money because of a missed deadline and further said that it was no longer interested in selling.
Diamond acknowledged receiving US$1.6 million in total from Surrey, but admitted that it ran into “difficulty” in returning the money, forcing it to enter negotiations with Surrey to settle.
The settlement, Diamond said, involved transferring 10,000 shares of the company, which was valued in July 2008 at J$1.8 billion (US$2.1m), to Surrey.
That valuation, it was argued, was part of the negotiations for the lease arrangement which Blake claimed Surrey agreed was necessary.
The transfer was reportedly completed in September 2008, but later that month, Surrey sued Diamond for the US$1.6 million and allegedly argued that shares were security for the debt.
A month later, on October 22, the Supreme Court granted judgment in favour of Surrey after Diamond failed to acknowledge the claim.
In December 2008, Surrey later applied to the court for an order in which the Puerto Bueno (Dry Harbour) Mountains property belonging to Diamond be charged with payment of the outstanding money.
Justice Roy Anderson granted the charging order in January 2009, and the following month, after hearing an application for sale of the land, ordered a valuation by Allison Pitter & Company and the sale by private treaty as against public auction.
It’s not clear whether Surrey’s attorneys had advised the court of the July 2008 valuation or of another assessment done in November 2008, which put the value at $450 million.
According to Diamond’s court documents, a day after the February 18, 2009 court orders, Pitter produced a valuation of the land “ridiculously and ludicrously” undervalued.
A copy of Allison & Pitter’s valuation showed that the property was worth between $60m and $65 million.
On March 5, 2009, Surrey reportedly sold the land for $61 million to Bengal Development Company, which was incorporated in St Lucia under the International Business Companies Act that same year.
The St Lucian law used allowed for the secrecy of beneficial owners.
The agreement was reportedly done by Delilah Limited, which provides directorship services, and Hewanorra Corporate Secretary Limited.
But Diamond claimed that the incorporation was done at the request of DunnCox for a party connected to Surrey and which was not disclosed to the local courts.
Several emails on March 4, 2009 between officials of DunnCox and Hewanorra Corporate Services Limited in St Lucia – in which company names were suggested and the urgency of the matter highlighted – were submitted to the court.
Donovan Walker, then an attorney with DunnCox and a named defendant in the matter brought by Diamond, declined to discuss any aspect of the case with The Sunday Gleaner.
Emile Leiba, a partner in DunnCox which was representing Surrey, also declined to comment.
Diamond said it commissioned an investigation leading up to the Eastern Caribbean Supreme Court, which ordered that the beneficial owners of Bengal be released.
The unsealed documents reportedly revealed that the beneficial owner was a Paris Wick Parboosingh, whom Diamond alleged in the Jamaican courts was the half-sibling of Leslie Chang, the chairman and managing director of Surrey Paving.
The documents, which the Eastern Caribbean Supreme Court ordered released, included the application to Hewanorra, which had the name ‘Paris Singh’ based in Florida, USA; the identity page of a US passport bearing the name ‘Paris Wick Parboosingh’; a Florida water bill; consent forms for the St Lucian companies to act as shareholders, directors and corporate secretary, as well as a statement from a law firm Nicholas John & Co confirming Parboosingh as the beneficial owner of Bengal.
Notwithstanding the sale of the land and correspondence from DunnCox that proceeds did not satisfy the debt, Diamond still pursued discussions to buy back the land.
Diamond told DunnCox that through undisclosed private equity firms, Blake was willing to pay the outstanding sums on the condition that the lands be transferred back to Diamond, a trail of 2010 correspondence shows.
Diamond’s lawyers at the time, Mullings & Co, on October 4, 2010, said he had applied for a loan of US$1.75 million to settle the debt and purchase Bengal. That process dragged out until Diamond’s claim, which was filed in the Jamaican Supreme Court on December 1, 2016.
It’s not fully clear what took place after, but almost a year later, on September 28, 2017, Diamond’s law firm Seyon T. Hanson & Co filed a notice in the court to discontinue the matter.
Less than a month later, US direct private lender, Kennedy Funding Financial, announced that it had closed an “extremely complex” US$2.09 million (J$267.5 million) deal with Jamaica World – new owners of Bengal – for the development of a commerce and trade centre at the property in question over a five-year period.
The financiers said the process involved seven lawyers drawn from the United States, St Lucia, and Jamaica.
Asked if he was aware of the antecedents of the company before the decision, Prime Minister Holness said: “No. But those things would not have been material in the consideration. What we considered was the environmental protection … and the development proposals.”
Holness, who has released the 72 conditions to which Bengal must adhere in its 20-year mining, has argued that the wider investment pitch for the property was crucial in weighing environmental risks and the potential for economic benefits.
However, there’s no timeline for when those other projects – ecotourism, residential and commercial operations – are to come on stream since Sweet, who worked in private equity in the US, said plans are yet to be designed and neither has any application been made to the authorities to use the lands.
Jamaica Environment Trust Director Diana McCaulay said the entity is awaiting a response to an access to information request for the appeal documents to determine next steps in its opposition to the plans, which may include a lawsuit.