Former Housing Development Corporation managing director Jearlean John last night labelled as a “distraction,” a lawsuit filed by the Attorney General, acting on behalf of the Ministry of Housing and Urban Development and ten other defendants.
Contacted last night, John said the claim was unprovoked by this “nasty, wicked-minded and incompetent Gargamel government. They are looking for a Smurf distraction as far as I am concerned. They can jump high or jump low, they can produce absolutely no evidence of any wrong doing on the part of the HDC for that transaction.”
However, John said she was certain she would ultimately prevail in the court.
“That is all right ...they are going to pay me my damages. This is really frivolous and vexatious. What did I do? I went to my board. I followed the rules. ... This is absolute nonsense! They filed a claim and hid it for eight months because they and all were ashamed of the nonsense they filed in court.”
The civil suit, filed in the Supreme Court on June 28, raises issues over why the value of a property purchased by the HDC increased by more than $100 million. Allegations of a $50,000 bribe being paid to a public servant to inflate the value of a 50-acre parcel of land were also raised in the lawsuit.
The defendants are John, Henckle Lall, Graig Davis, Peter Forde, Project Specialist Ltd, Ronald Heeralal, Point Lisas Park Ltd, Anthony Sampath, Patrick Soon Ting and Everil Ross.
The claim comes eight months after Al-Rawi initiated legal action against the defendants on allegations of corruption, but the document was only unsealed last Wednesday.
Last November, Al-Rawi had said the action was the first to arise out of extensive audits and investigations ordered by the Government after assuming office in September 2015. The nature of matters surrounded corruption, unjust enrichment, mismanagement and breach of certain duties.
Last March, John was fired by the HDC and shortly after six senior managers were sent on administrative leave to facilitate an audit, which was never made public. John and some of the since dismissed managers have sued the HDC for wrongful dismissal.
In the amended statement of case, concerns were raised about the acquisition of a parcel of privately owned land by a public body using State funds for a sum substantially greater than its market value. It focused on the purchase of land at Eden Gardens in Freeport for the construction of HDC homes.
“The cause of the payment of the excessive sum was the failure to take reasonable and sensible steps to conduct due diligence on the necessity of the transaction and the value of the land being acquired and/or the payment of a bribe by the seller to an employee of the Valuation Division of the Ministry of Finance involved in preparing a valuation of the land to justify the acquisition,” the claim alleged.
The claim stated that these failures constituted breaches of duty by some of the defendants.
In the amended version filed last Wednesday, the claim alleged a $50,000 bribe was paid to an individual at the Valuation Division of the Ministry of Finance. That bribe is linked to the reason why the value of the property catapulted to what is described as a “substantially inflated price for $175 million.” The document further claims the bribe was paid with the understanding that there would be a reward for the excessive valuation.
According to the documents, the process began in 2004, when the land was purchased for roughly $17 million. Based on infrastructure works carried out between 2010 and 2011, it was determined that the individuals who purchased the land spent roughly $34 million dollars.
In November of 2011, well-known valuators Linden Scott was asked to assess the value of the land. They placed the open market value at $52 million. However, that valuation was allegedly categorically rejected by some of the parties named in the lawsuit, the court documents stated. By January 2012, when the HDC board met to discuss the purchase the State alleges the price rose to $200 million.
The documents claimed the individual who received the bribe assisted in assessing the new value of the land and a final valuation of $180 million was given. However, the HDC purchased the land for $175 million, giving the impression that it received a $5 million discount, according to the lawsuit.
A senior official at the State company is quoted in a letter saying the Linden Scott valuation was “grossly understated” and requested that it be sent to the Valuation Division.
