Clouds over Sunway

In Parliament on Friday Opposition Chief Whip Ramesh Lawrence Maharaj claimed two directors of Sunway, Lee Hup Ming and Ng Chin Poh are brothers-in-law of Hart. He also outlined how the company, originally incorporated as C.H. Development and Construction Limited, changed its name to Sunway shortly after winning the contract for the Ministry of Legal Affairs Tower with a bid of $368 million.

Checks by Newsday reveal that the company was in fact incorporated on October 19, 2004, under the name CH Development. At the time it listed its directors as Lee Hup Ming, Ng Chin Poh and Leong Choong Chee. There is no reference to Sunway in the original incorporation documents. However, on January 27, 2005, the three directors transferred their single common shares each to Sunway Construction Sdn Bhd.

Sunway, based at Level 8, Petaling Jaya Selangor, Malaysia, then passed a special resolution at a directors meeting on May 5, 2005, to change CH Development’s name to Sunway Construction Caribbean Ltd.

On that very date, the company accepted the letter of the award of the Ministry of Legal Affairs contract from Udecott. Sunway, the parent company of Sunway Caribbean, also on that day issued a press release describing the Caribbean company as “a wholly owned subsidiary”.

But Newsday investigations further reveal irregularities with Sunway (Caribbean)’s file with the companies registry. For two successive years, the company failed to declare its mortgage position to the companies registrar, forcing a string of correspondence between the Registrar General and the company’s director.

By letter dated November 20, 2006, the Registry issued a query note to Sunway (Caribbean) informing it that documents filed with the registry were “not in order”. Particularly, in filing its annual return on November 17, 2006, the company failed “to state the total amount of indebtedness of the company to all mortgages and charges”.

This, despite having taken out, for instance, a $72 million mortgage from the Hongkong and Shanghai Banking Corporation, based in Malaysia, on November 11, 2005. The company simply declared its “total amount of indebtedness . . . in respect of all mortgages and charges” as nil.

On November 15, 2007, the Registry once more wrote Sunway saying: “Please be informed that (documents filed) are not in order. Kindly visit our offices at your earliest convenience for the purpose of rectifying the queries.”

Once more, despite having “mortgages created between this company and the banks . . . on file”, the company failed to indicate its amount of indebtedness. To date, no resolution of this impasse surfaces on the company’s file in the Companies Registry.

But not only has the local branch of Sunway run into trouble, but checks also reveal that its shareholder and Malaysian parent company, Sunway Construction Sdn Bhd, is facing legal action over a million-dollar construction contract for a four-lane road in the Indian State of Uttar Pradesh.

The Indian Supreme court has appointed an arbitrator to decide the dispute between the company and a sub-contractor, Shristi Infrastructure Development Corporation Limited.

Sunway Construction Sdn Bhd was awarded the contract for the construction project by the National Highway Authority of India on June 30, 2005.

On November 19, 2005 Sunway entered into a contract with Shristi for the construction of one- third of the stretch of the NH-25 highway. The value of the contract was Rs.134,37,91,938 (around TT$200 million).

But after years of delays and contractual disputes, Sunway terminated this agreement on June 16, 2007. The company encashed a bank guarantee, leading to the pending litigation in the Indian Supreme Court. Shristi is claiming that Sunway still owes it Rs.98,72,68,531 (around TT$14 million) plus interest.

By judgment dated December 3, 2007, the court appointed Shri Justice HL Agrawal, a former Chief Justice of the Orissa state’s High Court, as arbitrator.

“The respondent company (Sunway) has admitted the existence of disputes and differences arising between the parties which are the subject matter to be referred to a sole arbitrator,” the Indian Supreme Court Justice Lokeshwar Singh Panta noted in his judgment.

After allegations made by Mr Maharaj in Parliament on Friday, Prime Minister Patrick Manning announced the setting up of a Commission of Inquiry into Udecott and the construction industry in Trinidad and Tobago.

The Commission of Inquiry will be held instead of the planned Joint Select Committee of Parliament which was to have enquired into the operations of Udecott but which got no support from the Opposition or Independent senators.

The Commission is to be headed by former Integrity Commission chairman Gordon Deane.