‘$4.5M was not on balance sheet’

Former chairman of the Agricultural Development Bank (ADB) Hubert Alleyne admitted yesterday that when monies are paid to the bank, it belongs to the bank, but said that the $4.5 million paid to the bank by the National Poultry Company Ltd (NPCL) was not a payment of its $6 million debt, nor did the money belong to the ADB. He said it was held on trust for the company, but there was no trust deed, only an agreement. The bank’s Board, which Alleyne chaired, had taken a decision to invest the money in a life insurance policy with Clico, but Alleyne was unable to say who the beneficiaries were. Alleyne explained that the NPCL was owing the bank about $6 million and the bank was holding the company’s property as security. When the company paid the sum of $4.5 million, the bank released the mortgaged property and held the money instead as security. He insisted that the money was not the bank’s own to do as it wished because of an agreement with the company.

Alleyne is defending the bank against a judicial review proceeding brought by Seebalack Singh, who was fired as the bank’s CEO for failing to implement the Board’s decision to invest the $4.5 million with Clico, misrepresenting a decision of the Board, and distributing private and confidential documents of the bank when he sought legal opinion on the Board’s decision to invest with Clico. Singh is claiming that the investment was illegal and ultra vires. Singh is being represented by Dr Fenton Ramsahoye SC, Anand Ramlogan, Narendra Beharry and assisted by British attorney Jodie Blackstock, while  attorneys for ADB are Elton Prescott and Phillip Lamont. The matter is being heard before Justice Amrika Tiwary-Reddy in the Port-of-Spain Third Civil Court. During cross-examination by Ramlogan, Alleyne said he assumed that when the mortgage was released, a deed of release was prepared. He said the $4.5 million was not placed as an asset on the ADB’s balance sheet, but was temporarily put in the bank’s current account on behalf of the client.

Alleyne said that Ramlogan’s suggestion, that if the money did not belong to the bank, then the bank would not have released the mortgage, was incorrect. Alleyne also rejected Ramlogan’s preposition that if it was a mere deposit by the company with the ADB to hold the money on trust, then the bank would not have released the security. Alleyne again rejected that the $4.5 million was full and final settlement of the monies owed to the bank by the company. He said even after the $4.5 million was paid to the ADB, the company continued to owe the bank $6 million, but he believed that there was an arrangement so that the company would not have to pay interest on the $6 million. Alleyne admitted he did not know the value of the property when the bank released it to the company, nor did the Board request a valuation before releasing it.

When Ramlogan suggested to Alleyne that he (Alleyne) had given up one form of security for another without knowing the value of the security he was giving up, Alleyne’s reply was, “I can’t say.” In another response to Ramlogan, Alleyne said that the ADB was not in the habit of accepting people’s money and investing it on their behalf. He said the bank did not seek the approval of the company before investing the money, because it was not a specific term of the trust. He said the agreement of the trust was signed by Singh and could be made available to the court.  Ramlogan then asked Alleyne why he made no mention of this document in his affidavit. Hearing continues today.