Call for Immediate Forensic Audit into the Operations of GEMS


Rodney Wilkinson in handcuffs

The news that the bagman has been arrested on 67 counts of fraud is big news in Barbados. In BU’s opinion it ranks in the top three memorable moments since our Independence because of his high profile status given his connection to high profile politicians. Time will tell if our competent legal system will work to make at least 25% of the charges ‘stick’.

Those who wonder if the bagman would have had to suffer the same public ridicule as the former Prime Minister’s brother Richard Arthur had a different administration been in office, probably not. The scenario playing out gives hope to the optimists that the wheels of justice may yet turn on one of its own.

Rodney Wilkinson was the CEO of GEMS/HRL project that included at the time Savannah Hotel, Blue Horizon, Time Out, Eastry House and Silver Rock properties. The W in JAWS is for Wilkinson?

BU will be labelled as being foolishly optimistic by some to expect the justice system to wheel into motion to work like it is suppose to in the matter of Wilkinson versus Globe Finance and NASSCO.  The Auditor General has been unflattering in several reports regarding the management of Hotel Resorts Limited aka GEMS. In light of recent events BU is calling for a forensic audit into the operations of Hotel Resorts Limited in the period when Wilkinson was CEO.

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Bad News for Barbadian Taxpayers, JAWS has Returned!

Adrian Loveridge - Hotelier

Adrian Loveridge – Hotelier

Whatever was behind any honest intention of the Hotels and Resorts Limited (HRL) aka GEMS debacle, it is difficult to imagine a worse outcome so far. Government’s decision despite the current austerity situation to guarantee yet another loan to this failed entity frankly defies belief and clearly will not have a happy ending.

This latest loan is for BDS$5.55 million at an interest rate of 7.75 per cent, arrangement fee of $350,000 and monthly repayments of $55,000. Included is a $300,000 overdraft facility which attracts an administration charge of $5,000 each month. HRL now operate a single hotel, Blue Horizon with just 67 rooms. Another 50 additional rooms acquired at the time of purchase (1997) remain derelict all these years later. Savannah and Time Out at the Gap are leased and operated by private sector interests. Three other properties originally in the GEMS portfolio were sold and it still remains unclear what price they realised and exactly where those funds went.

Despite repeated pledges of transparency and accountability apart from a tiny private shareholding, the sole owner of HRL (the Barbadian taxpayer) is left almost completely in the dark. Statutory corporations appear not to have any obligation to publish their annual audited accounts, unlike publicly traded companies.

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482911378439951.jpgI have been off the island for a few days, so it has taken a little while to catch-up on the news. It was with absolute incredulity I read a Nation headline dated Monday 17th September 2007 emblazoned Gems Glow – Mascoll: Properties can now turn a profit’. The article went on ‘The huge investment Government placed in the controversial GEMS hotel project has paid off where some of the properties can now be sold at a profit’.

A ‘profit’ after what! After writing-off what could be hundreds of millions of dollars of debt?

I will accept that the land value of the properties may have increased, but certainly not the properties themselves. You only have to take a look at Blue Horizon Hotel to see evidence of that fact.

What about the 20-30 rooms that are still left derelict and untouched?

It is very difficult for serious tourism industry players to follow the varied and at times 360 degree opinions of Mr Mascoll, but these comments beg disbelief. To draw the conclusions he has arrived at in this article must mean that he has studied in detail the latest audited accounts of Hotels and Resorts Ltd., something sadly the hard pressed Barbadian taxpayer has not been fortunate to. Mr Mascoll also made no mention of exactly where the funds from the sale of Eastry House and Silver Rock Hotel have gone too either. A question that the Minister responsible for the GEMS project has skilfully managed to avoid for sometime!

To infer that the GEMS project is glowing is a gross insult to every Barbadian, whether he or she has even a basic understanding of the tourism industry.

Adrian Loveridge

27 September 2007