In 2020, the Mia Mottley administration concluded that Clearwater Bay Ltd. needed to put itself in a position to call the loans and to enforce its security.
“Moderator Walter Blackman made a big Boo-Boo in his response to the very last caller on the Brasstacks programme today. The inimitable “Commissioner” of St. George told him that the NIS loan to the former Paradise Beach Hotel was written off.
Mr. Blackman said “No. That investment wasn’t written off.”
NOT TRUE WALTER!! He was probably still ‘over and away’ in Atlanta, Georgia at the time, and is unaware of that policy decision. BUT, BUT Commissioner was absolutely correct – that $120 million WAS INDEED WRITTEN OFF BY THE CABINET OF BARBADOS.
…AND a certain person, the Prime Minister, a lawyer who was formerly involved in that capacity with Clearwater Bay limited recused herself from that particular Cabinet meeting decision. That information was openly divulged to the public by the Minister in the Ministry of Finance on a VOB Brasstacks programme.”
part of a whatsapp message forwarded to Walter blackman on March 22, 2023.
The above is part of a WhatsApp message that was forwarded to me on March 22, 2023. I have no idea who the author is, but I hold the view that this scandal should be well understood by Barbadians currently alive, and must be documented for future generations to read. To achieve this objective, I am going to place heavy reliance on the Auditor General’s report for the fiscal year ended March 31, 2021.
There are several properties commonly called the Four Seasons properties. Someone or some entity borrowed US$60 million from Consolidated Finance Co. Ltd and used these properties as security for that US$60 million loan.
It is important to bear in mind that the Four Seasons project was a private project being undertaken by private investors. There was no need for the financial involvement of the Government of Barbados.
Lo and behold, the Freundel Stuart administration, acting through Clearwater Bay Ltd., a government company, entered the picture and made a loan guarantee of BDS$120 million in connection with the construction of the proposed Four Seasons managed hotels and villas. Government’s financial involvement in the Four Seasons project is RED FLAG #1.
Not surprisingly, sometime after the Government of Barbados guaranteed the Four Seasons loan, Consolidated Finance Co. Ltd. called the loan. Clearwater Bay Ltd., acting as an agent of the Ministry of Finance and Economic Affairs, repaid the loan in full.
This suggests that, up to that point, someone or some entity had pocketed US$60 million. The pocketing of US$60 million by the original borrower from Consolidated Finance Co. Ltd. is RED FLAG # 2.
Additionally, the Freundel Stuart administration, acting in concert with the civil servants at Clearwater Bay Ltd., used Barbadian taxpayers’ money to pay BDS $120 million to Consolidated Finance Co. Ltd. The use of Barbadian taxpayers’ money in a situation like this requires strict adherence to regulatory procedures and control. The Auditor General has stated that the regulatory procedures were not followed in this case. The refusal or inability, on the part of Clearwater Bay Ltd., to follow the rules and regulations which govern how taxpayers’ money should be handled in these types of transactions is RED FLAG # 3.
By a deed of assignment, dated September 1, 2016 and overseen by the Freundel Stuart administration, Consolidated Finance Co. Ltd. assigned its rights to Clearwater Bay Ltd., which then became the holder of the security over the Four Seasons properties.
Paradise 88 Ltd. was the original owner of the lands and it sold the properties to Pharliciple Inc. The total selling price was US$59.65 million. THE DEEDS WERE RECORDED IN THE LAND REGISTRY. The monies for the sale of the properties were to be paid to Clearwater Bay Ltd. However, Pharliciple Inc. never paid Clearwater Bay Ltd. one cent. How could Paradise 88 Ltd. freely sell these properties if Consolidated Finance Co. Ltd. had assigned its security rights to Clearwater Bay Ltd.?
The sale of the Four Seasons properties to Pharliciple Inc., without Pharliciple Inc. paying a cent for the properties, is RED FLAG # 4
There were some directors of Pharliciple Inc. who were also directors of a company named Blue Development Ltd.
In 2016, Clearwater Bay Ltd., acting under its power of sale as a mortgagee, sold the Four Seasons properties to Blue Development Ltd. for US$59 million (BDS$118 million). Not a cent was paid, but security was given to Clearwater Bay Ltd by a debenture for BDS$58 million, and a deed of charge by way of legal mortgage for BDS$60 million.
THESE DEEDS REMAIN UNDATED TO THIS DAY, AND NEITHER THE DEED OF CONVEYANCE, THE DEBENTURE, NOR THE MORTGAGE WERE EVER FILED IN THE LAND REGISTRY, AND COMPANIES REGISTRY IN THE CASE OF THE DEBENTURE. The effect of this is that Clearwater Bay Ltd. is holding security documents that have not been “perfected” and that cannot be enforced.
The sale of the Four Seasons properties by Clearwater Bay Ltd. to Blue Development Ltd. for no cash or proper security documents is RED FLAG # 5.
The implied woeful performance of the lawyer representing the interests of Clearwater Bay Ltd. is RED FLAG # 6.
Additionally, there was an agreement entered into at the same time between Clearwater Bay Ltd. and Blue Development Ltd. which stated that, for so long as Blue Development Ltd. was in discussion with an investor, Clearwater Bay Ltd. would take no steps to enforce the securities.
Blue Development Ltd. only had to claim that it was in discussion with an investor and Clearwater Bay Ltd. could do nothing to recover the monies paid by Barbadian taxpayers. This is RED FLAG # 7.
Who provided the legal services to Clearwater Bay Ltd.? The casual reader might be tempted to easily accept that professional incompetence was responsible for the sad state of legal affairs at Clearwater Bay Ltd. related to this matter, but that might not necessarily be the case.
A contending view is that the Four Seasons debacle amounts to the result of efforts which were made to extract over one hundred and twenty million dollars from the consolidated fund, and place it in the hands of a group hand picked by politicians. It is plain to see that some politicians do not have the interest of Barbados, and the majority of Barbadians, at heart.
According to the Auditor General, the loan to Four Seasons was originally shown as a receivable, but was then written off in 2018. Was it before or after May 24, 2018? The Auditor General stated that the loan should not have been written off and every sensible Barbadian should agree with him. Writing off is the accounting treatment of a particular item. There is nothing to prevent a company from receiving monies for an item which was hitherto written off. If the money is eventually retrieved, there is an accounting treatment for that recovered item as well.
In 2020, the Mia Mottley administration concluded that Clearwater Bay Ltd. needed to put itself in a position to call the loans and to enforce its security. This suggests to the casual listener that Clearwater Bay Ltd. is now being asked to position itself to recover Barbadian taxpayers’ money. To all practical intents and purposes, that money has not been written off.
The original amount of money invested by agencies of the Barbados Government in the Four Seasons project was BDS$134.1 million, made up as follows:
Clearwater Bay Ltd. BDS$124.3 million
NIS BDS$ 9.8 million
Total BDS$ 134.1 Million
If we assume that the BDS$134.1 million was loaned on January 1st, 2017, and the rate of interest is 5%, then the amount of money owed to the NIS and the taxpayers of Barbados by the Four Seasons properties at December 31st, 2023 is BDS$188.7 million.
Every Barbadian taxpayer needs to pay attention to the rising amount of money that must be repaid to the consolidated fund, once the Four Seasons properties are finally sold.
Walter Blackman
December 31, 2023
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