Christie announces probe of Bashco-UDC deal

The Contractor general has launched an investigation into the Urban Development Corporation's (UDC) pending sale of a property in downtown Kingston to Gassan Azan, arguing that the transaction raised questions regarding its propriety, given expressions of interest by the current occupier.

In a letter to Prime Minister Bruce Golding and his permanent secretary, Onika Miller, Contractor General Greg Christie said the UDC sold the property to the Azan-owned Bashco Trading Company for J$31.4 million even though Michael Mahfood of H. Mahfood & Sons Limited, who has occupied the state-owned premises at 35 West Parade for more than 30 years, was willing to pay substantially more to acquire it.

Christie said he initiated the probe after receiving a complaint from Mahfood's lawyers, Hart Muirhead Fatta.

Azan told Wednesday Business that the contractor general was within his right to launch an investigation, noting that the probe was directed at the UDC and not at his company.

"We are known for renovating downtown Kingston and that is the purpose of the purchase - redevelopment," he said.

UDC general manager Joy Douglas was said to be a meeting when her office was contacted, but she relayed a message to say that she had no comment at this time.

Offer snubbed

According to Christie, the allegations and representations by the lawyers included a concern regarding the process by which the property was being divested by the UDC, its registered proprietor, as well as the assertion that on several occasions Mahfood "has offered to purchase or take a long-term lease of the property."

"The UDC has consistently rejected those offers on the basis that the property is required for road widening," Christie's letter alleged. "Not only was Mahfood not given the opportunity to buy the property, but the desire to sell this public asset was not advertised or otherwise made public."

Christie said his investigation was also informed by an allegation by the lawyers that the property was being sold to Bashco for J$30 million although Mahfood "is prepared to pay substantially more to acquire the property, having regard to perceived market value and our client being prepared to pay a premium to continue business there."

He also pointed out that Douglas failed to address and satisfy, in a timely and fulsome manner, concerns raised with her by the contractor general's office on September 30 regarding the premises.

As at the stipulated deadline on October 11, Christie said, the general manager wrote to the contractor general's office advising that an agreement for sale was executed on August 11 for J$31.4 million.

Concerns not addressed

However, Christie said the response did not address concerns regarding the procedures undertaken by the UDC in the divestment of the property, as well as the method by which the property was advertised.

In another correspondence, Christie said, Douglas advised that the UDC received an unsolicited proposal from Bashco, through Azan, its principal, to purchase the property. She also advised that Azan submitted a developmental plan which, upon review, coincided with the UDC's plan for the redevelopment of the area.

While she admitted that it was a breach of the public-sector divestment procedure not to have publicly advertised the property, according to Christie's letter, Douglas said that could be explained "on the basis of the Corporation's historical operation, and we genuinely erred."

Chief investigator at the contractor general's office, Maurice Bennett, will head the inquiry into how the transaction was negotiated and settled, as well as the identity of public officials and other persons who were involved in the discussions.

The investigation also seeks to establish "whether there is any evidence which would suggest that any public officer or person whether by his conduct or participation in the ... arrangement may have contravened the Corruption Prevention Act", the Contractor General Act or other laws.

mcpherse.thompson@gleanerjm.com