NIS Owed 13 million by ‘Paradise’ NOT 60 Million

The derelict Paradise property

The following exchanges took place between Chairman of the NIS Dr. Justin Robinson and BU Blogmaster on Facebook Group FB Senate, a group administered by Senator John Watson. What was debunked by Chairman Robinson is that the NIS approved a USD60 million dollar facility that was utilized for the Paradise (Four Seasons project). The Chairman further confirmed that the NIS is exposed to the Paradise (Four Seasons project) the amount of 13 million dollars owed by government. The expectation is that the NIS will be paid from the proceeds of the sale of Paradise to JADA for USD60 million dollars

BU blogmaster

 

David King is with Justin Robinson.

2 hrs

Chairman Justin Robinson for the sake of transparency where does the NIS sit in this latest revelation? “Barbadians need answers on this Four Season sale.

How was the sale brokered? Was it done through the former executive chairmen of Paradise Limited Professor Avinash Persaud who was head hunted specifically for the task by the late Prime Minister David Thompson? Was the sale brokered after Professor Persaud left the Paradise organisation? Was the sale brokered before or after the IADB withdrew their funding for the restart of the Four Seasons project? Was the sale of the property advertised publicly, far and wide, locally and internationally as is the case with the Harlequin property at Merricks? Were bids for the property invited by open tender or was it put only to a select group of potential investors/buyers? Are there any finders’ fees involved for the party/parties who brokered the deal with Jada?

These are questions that Barbadians need to have answered. Clearwater Bay is a government owned and taxpayer funded company which is party to the sale. Recall that a US$60 million guarantee was provided by Clearwater Bay through resolution of Parliament which was eventually called by Ansa Merchant Bank.

What is the final cost to taxpayers for this? The net proceeds of the sale will be less than the US$60 million due to attorneys’ fees, duties etc.

Is the Barbadian taxpayer burdened with a loss as a result of government having getting involved in a private sector project????”

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David King

David King I should caution that any clarification statement offered may or may not be reported to BU.

Manage

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· Reply · 2h

Justin Robinson

Justin Robinson NIS is in no way involved. the NIS is owed approxiMately 13ml by the project and expects to be paid from.any cash flows to the government.

1

Manage

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· Reply · 2h

Philip F. Corbin

Philip F. Corbin Didn’t Govt use NIS funds in the amount of US$60M to pay the Ansa Loan which was guaranteed by the govt and on which Clearwater defaulted ?

Manage

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· Reply · 2h

Justin Robinson

Justin Robinson the NIS has made a 60 million facility available on certain conditions. The conditions were never met so the funds were withdrawn.

Manage

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· Reply · 2h

Justin Robinson

Justin Robinson the NIS is on the hook for 13ml. One of the more controversial decisions in my time. I am still.of the view that if all that could be done had been done to get that project restarted at the time we could have avoided years of economic decline.

Manage

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· Reply · 2h

Philip F. Corbin

Philip F. Corbin ‘NIS on the hook for $13M’ …..is that the balance of a loan given to Govt or Is it a shortfall in NIS contributions ? US$60M flowed into Govt in 2016 so why has NIS not been paid up to the year 2018 ?

Manage

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· Reply · 2h

Justin Robinson

Justin Robinson I don’t know if 60ml was paid or has been paid and property handed over. an agreement was concluded. the 13ml is an investment in the project.

Manage

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· Reply · 2h

Philip F. Corbin

Philip F. Corbin Thank you

Manage

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· Reply · 1h

Justin Robinson

Justin Robinson thats not really clear from the story in the paper today

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· Reply · 1h

David King

Reply to this…

David King

David King Dr. Robinson to be clear, you are saying that NIS is only exposed for 13 million that was invested in the project. And that the 60 million facility was never drawn down. Are you also saying that with the sale no arrangement to formally address the NIS was made a condition of the sale?

Manage

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· Reply · 1h · Edited

Justin Robinson

Justin Robinson 13ml. the 60ml facility was never drawn down. NIS was not a party to the sale or negotiations. the 13ml is due from the government.

Manage

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· Reply · 1h

David King

David King The 13 million was advanced to government in what form?

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· Reply · 12m · Edited

David King

175 comments

  • Global accounting watchdogs identified serious problems at 40 per cent of the audits they inspected last year, raising fresh concerns about the quality of work being carried out by the world’s largest accounting firms.
    According to the International Forum of Independent Audit Regulators, accounting lapses were identified at two-fifths of the 918 audits of listed public interest entities they inspected last year. (Quote)

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  • Audit quality and the consistency of audit execution in public companies has been found wanting again by the International Forum of Independent Audit Regulators (IFIAR)
    The international umbrella body for audit regulators found the highest number of audit issues in the areas of fair value measurement, internal control, and revenue.
    IFIAR members reported findings from inspections of three categories of audit firm activities – audits of listed public interest entities (PIEs); audits of systemically important financial institutions (SIFIs), including global systemically financial institutions (G-SIFIs); and internal systems for firm-wide quality control.
    We continue to see high levels of inspection deficiencies in vital areas of public company audits
    Lewis Ferguson, IFIAR chair
    The findings in the survey are primarily from big six audit firms affiliated with the six largest international audit firm networks, which are BDO International, Deloitte Touche Tohmatsu, Ernst & Young Global, Grant Thornton International, KPMG International Cooperative, and PricewaterhouseCoopers International.(Quote)

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  • Here is a story t hat tells why auditors carry out a public function:

    Theranos and its founder settle U.S. fraud charges: SEC

    Pete Schroeder
    4 Min Read

    Embattled blood-testing company Theranos Inc and its Chief Executive Elizabeth Holmes agreed to settle “massive fraud” charges in a deal that strips her of majority control among other penalties, U.S. regulators said on Wednesday.
    Theranos was once hailed as a Silicon Valley star, with a $9 billion valuation based on its promise to disrupt the staid laboratory testing business with new technology the company.
    As part of the settlement, the Securities and Exchange Commission said company founder Holmes must also return millions of shares to the privately held company, pay a $500,000 fine and cannot serve as an officer or director of a public company for 10 years.
    The SEC’s complaint alleged that the company, Holmes and Theranos’ former president, Ramesh “Sunny” Balwani, “made numerous false and misleading statements in investor presentations, product demonstrations, and media articles” about its key product.
    Balwani did not agree to a settlement, the agency said.
    Theranos raised more than $750 million from investors including well-known venture capital firm DFJ, Walgreens, media mogul Rupert Murdoch and Oracle co-founder Larry Ellison. Many investors have already sold their stakes.
    The SEC, describing the case as involving “massive fraud,” said Theranos, Holmes and Balwani were charged “with raising more than $700 million from investors through an elaborate, years-long fraud in which they exaggerated or made false statements about the company’s technology, business and financial performance.”
    The SEC’s co-director of enforcement, Steven Peikin, said on a conference call with reporters that the move to remove control of the company from Holmes was very rare for the agency.
    “It’s a pretty unique set of remedies,” he said. “And I think it’s a particularly meaningful one … particularly in Silicon Valley where the founders of startup companies like this obviously value the concept of control.”
    Peikin said the SEC intends to pursue litigation against Balwani. The regulator pursued charges against Holmes and Balwani to deter executive wrongdoing elsewhere and out of concern that imposing stiff penalties on the company itself could make it even more difficult for defrauded investors to recoup any funds.
    “Really this company was a company that was a two-person operation, where Holmes and Balwani exclusively controlled Theranos. They were responsible for all of the misconduct alleged in this complaint,” he said.
    Peikin did not comment on whether the civil charges preclude future criminal charges or whether other agencies were engaged in ongoing criminal investigations against the company.
    Jina Choi, the head of SEC’s San Francisco Regional Office, said the company’s troubles offered “an important lesson for Silicon Valley.”
    “Innovators who seek to revolutionize and disrupt an industry must tell investors the truth about what their technology can do today, not just what they hope it might do someday,” she said in a statement.

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  • NorthernObserver

    More fraud convictions, and this guy is an a**hole, best remembered for smugly “taking the 5th” in testimony before Congress. Maybe he gets Max security, in which he will get the 5th, 6th, and 7th, maybe all at one time.
    https://www.cnbc.com/2018/03/14/martin-shkreli-asks-to-serve-fraud-sentence-in-minimum-security-camp.html

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  • It is amazing that when the failing of ONE insurance company, CLICO, is mentioned we are reminded about Barbados’ imcompetent, regulatory system……….

    ………….yet, with all the superior regulatory systems in place in these “big countries,” we hear about MORE fraudulent activities and breaches of these systems.

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  • An update on auditing by the body responsible for the discipline of the profession in the UK.

    FRC Auditing Standards and Ethical Standards 2016 is an official document issued by the Financial Reporting Council (FRC).
    The FRC is responsible for promoting high quality corporate governance and reporting to foster investment.
    They set the UK Corporate Governance and Stewardship Codes as well as UK standards for ACCOUNTING, AUDITING AND ACT UARIAL WORK.

    FRC Ethical and Auditing Standards 2018
    New!
    Release Date: February 26, 2018
    £77.00

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  • An update on auditing by the body responsible for the discipline of the profession in the UK.

    They set the UK Corporate Governance and Stewardship Codes as well as UK standards for ACCOUNTING, AUDITING AND ACTUARIAL WORK.

    Would you mind telling us what does this have to do with Barbados.

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  • KPMG was banned from auditing public institutions in South Africa, compounding a crisis for the auditor in the country over its role in a high-profile bank failure and ties to the controversial Gupta family.

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  • Here is another titbit about the regulation of accountants in the UK, which should add further clarity to a much misunderstood subject. Today’s Times reports:
    “The accountancy industry believes that the audit watchdog should have its powers restricted.
    “The Institute of Chartered Accountants in England and Wales, which represents 150000 accountants, will tell a review in to the Financial Reporting Council that reducing the body’s role would improve wider regulation of the auditing industry….”

    In simple terms, the ICAEW is the sector’s trade union and the FRC 0the regulator. Hope this clarifies the matter.

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  • “……which should add further clarity to a much misunderstood subject?????”

    What does the regulation of accountants in the UK has to do with the profession in Barbados????

    A non-point and a non-issue.

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  • Today, Wednesday May 16, the joint House of Commons pensions and business select committees have published a 101-page report on the collapse of Carillion, the outsourcing company.
    Two things are of importance to Barbadians: first, the role of external auditors and their public duty responsibilities (some of you may recall one chartered accountant in this blog denying any such responsibility), by calling for the break up of the four leading auditing firms – E&Y, PwC, KPMG and De Loitte – removing them from the wider accountancy firms.
    The other point is that some time ago I called for a new and radical Companies Act, only to be reprimanded by the chairman and reminded of the history and legal structure of corporates. Be that as it may.
    The report reinforces my point: that although in our outdated system the owners of companies may be seen as shareholders the reality is that executives run companies in their own interest, as against that of shareholders, employees, the board or any other stakeholder.
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  • I recall a journalist writing that reading several financial statements qualifies him to comment on accounting issues.

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  • Artax May 16, 2018 7:38 AM

    What a terrible journalist. Some journalists also learn to read financial reports at some of the best business schools in the world who run top of the class financial courses. That is why we have financial analysts.
    Al drivers do not have to be taxi drivers; the same way all those who know about accounts do not have to be accountants.

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  • Hmmmm, thanks for the information.

    I hope you’re proud of your friend and congratulated him/her on his/her achievements.

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  • I am always here to help. It will be interesting hearing about the acknowledged pubic responsibility of external auditors and not the formal but fictional responsibility to the remuneration committee. It is a responsibility recognised throughout the western world.
    By the way, I have an old copy of UK GAAP to off load, the person will have to pay the postage. It still has historical value.

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  • If the “old copy of UK GAAP” “still has historical value,” perhaps you should keep it for sentimental reasons.

    And since you’re “always here to help,” you could probably enlighten us “about the acknowledged pubic responsibility of external auditors and not the formal but fictional responsibility to the remuneration committee.”

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  • At the heart of the decline in public confidence in auditing is a flawed business model. Auditors are, in effect, guarantors of the integrity of the numbers on which capitalism relies. Yet this low-margin public interest function has become a poor relation to the consultancy and other services that the Big Four provide. In 2016 they earned £2bn from audit and £7.9bn from non-audit work, of which £1.1bn was from audit clients. Here lies an important explanation for poor audit quality. As the report aptly notes, this is a market that works for the Big Four but fails the wider economy.(Quote from the FT)

    The great John Plender, writing in the Financial Times, stating what I have been trying to tell some people: auditors have a public duty, which some local chartered accountants do not seem to realise.
    Is it time to have a national debate about the role of auditors? Is it time for a new Companies Act?

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  • For anyone interested in the role of external auditors in modern capitalism, there is an intense debate taking place in the UK following the collapse of Carillion. Two new books have just been published on the subject: Bean Counters, by Richard Brooks; and, The Big Four, the Curious Past and Perilous Future of the Global Accounting Monopoly, by Ian D. Gow and Stuart Kells.
    What is interesting about these books, is not only that they have laid to rest the fiction of auditors working for the remuneration committee, and thus for the hiring company, but their wider public responsibility as has been pointed out in these pages, but the urgency of the new Barbados government to put a new Companies Act on the statute books, divorcing auditing from mainstream accounting.
    At the same time, the central bank needs reform, with a new board, a new governor and, most of all, a new and relevant Central Bank Act.

    Like

  • PwC has been hit with a record £6.5m fine by the UK ACCOUNTING WATCHDOG over misconduct in relation to the Big Four accounting firm’s audit of retailer BHS two years before its collapse.
    The fine surpasses the previous record penalty of £5.1m — also handed to PwC last August in relation to its audit of finance firm RSM Tenon— and further highlights widespread concerns about quality in the accounting market.
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  • I was going to ignore this contribution……it’s author does not like to be proven wrong and he resorts to old shiite that was tried and tested to prove some point, which perhaps boosts his self esteem……….

    …………..but I’m forced to ask….what the hell does this have to do with Barbados?

    Stupssseee!!!! Grow up my friend.

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  • Reuters is reporting that the FBI has brought charges against Elizabeth Holmes, the former head of Theranos, for making bold claims about her high-tec company.
    The details are not important, what is for Barbados is that once again auditors are found wanting. It is another example of the urgent need for a new Companies’ Act in Barbados, one which separates auditors from general accountants with their own regulator.
    The US did it after the scandals of Enron and Worldcom, the Europeans have done it and so have the Brits. The basic fat is that auditors have a wider public duty than just reporting to the remuneration committee which hired them. That may seem basic in developed financial capitals, but for some it may seem difficult since it is not what the text books say.
    One for the new government.

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  • More problems for auditors – this time in the US. PwC, one of the big four auditing firms, has been fined US$625m for negligent auditing.
    What should be of interest to the authorities in Barbados is that the Judge said PwC fell foul of regulations because its audits were not designed to detect fraud. In other words, one of the roles of the auditor is to identify suspected fraud and raise it with the appropriate authorities, not just with the remuneration committee which hires them, as some Barbadian accountants seem to think. (go back and read the long discussion we had in this blog, sometimes very rude and aggressive).
    I have said before, we need to separate auditors from the main stream of accountants (the way that we separated barbers from surgeons), in a new Companies Act..

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  • Dodgy accountants and auditors are it again. According to the textbooks, dividends are paid from profits. But modern day auditors allow dishonest executives to take out company loans from which dividends are paid still pass the accounts as a going concern. Ultimately, it is the taxpayer who is robbed since company loans are tax deductible. Another reason why we need a new Companies Act in Barbados outlawing all this little corporate tricks.

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  • Just read a good book review (I have not yet bought the book) of a new title: Bullshit Jobs: A Theory, by David Graeber. Among the BS jobs are HR, PR, accountants, PAs, in-house journalists, chauffeurs, lawyers, etc. He should have included politicians.

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  • The big four accountancy firms are now in trouble over their auditing practices. When are the Barbadian authorities going to look into these practices. We have some chartered accountants who do not even appear to under the regulations around the profession.

    Like

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