Those who did the harm to the fine folks currently in disputed occupation on lands owned by Arawak Homes should be brought to justice

Arawak Homes; Truth and Facts
By Felix Bethel
jonesbahamas



Regrettably, the Wilson family, Arawak Homes and some of their business associates have become and now stand as objects of scorn and easy vilification by many Bahamians who cling to their misguided views concerning some acreages of land in Pinewood Gardens that clearly belong to Arawak Homes.

This matter begs for a solution that might well be compared with one such that could be made by a modern-day Solomon; such a one that would recognize the views, values and aspirations of those people who were duped, ripped off and otherwise abused by any number of fraudsters.

While we know it for a fact that, Mr. Franklyn R. Wilson, his family and Arawak Homes have what it takes to defend themselves, we would like – for the sake of the record- to tell the public that, we abhor some of the most recent attempts made to demonize this man, his business and his family. For quite some time now, Mr. Wilson, his family and very many of his business associates have been the intended victims of any number of slurs, charges, innuendoes and a host of unfortunate characterizations – which taken together – amount to one of the nastiest cases of collective character assassination in today’s Bahamas.

This latest effort comes on the heels of some of Arawak Homes’ legitimate attempts to take full and free possession of lands that belong to them – as attested and affirmed by the highest courts in our land.

Were we living in a place where good sense and the rule of law happened to be the order of the day, this would have been the end of the matter as far as Arawak Homes and its principals were concerned.

As for the gangsters who duped the poor; those whose duty it is to ferret out and bring to justice such crooks should be given the time, the resources and other materiel needed to bring them all before the courts.

It is incontestably factual that, "Blatant fraud and dishonesty" have left scores of Bahamians without good title to their homes on a 150-acre tract of land near Pinewood Gardens…”

We also know that it is a fact that, some of this fraud’s perpetrators have gone so far as to falsify a Supreme Court judge's order in an apparent bid to cover their tracks.

In addition, we know that, in at least two Supreme Court judgments, we find a classic tale of how a greedy group hiding behind the name Horizon Systems, aided and abetted by unscrupulous attorneys, have exploited poor, unsuspecting Bahamians for their own financial gain.

In this regard, note that, in one of the said judgments –as rendered by former Senior Justice John Lyons on November 7, 2003 – there is evidence galore to show that John Sands, aided by his attorney Leon Smith, of Smith, Smith & Co, fraudulently induced the Supreme Court to issue him a Certificate of Title to the 156-acre tract on November 30, 1990, via a Quieting Titles action.

We also know that, it was precisely this Certificate of Title, which was set aside by the Supreme Court; with such “titles” being of absolutely no value. And for sure, these rulings do show that Arawak Homes has good title to the land; and that the real grievance the homeowners do have is with the fraudsters who sold them land in the first place.

Evidently, those people who used attorneys to conduct title searches are best placed to recover their money; this because they can sue those lawyers for negligence and claim against their professional indemnity insurance. As regards the second judgment, delivered by Supreme Court Justice Hartman Longley, it was found that within a week of obtaining his fraudulent Certificate of Title, John Sands had conveyed the entire 156 acres of land to Horizon Systems for a collective $107,000.

Mr. Leon Smith acted for both seller and purchaser.

This action was in clear breach of a 1991 Supreme Court injunction preventing Mr. John Sands from selling any part of the 156 acres in question. Clearly, then, this means that both Mr. Sands and Horizon Systems were then in blatant contempt of the court.

But as telling happens to be the fact that, Horizon Systems then, according to Justice Longley's ruling, began selling lots to Bahamians, many of whom were relatively poor and lacked the means to pay attorneys to conduct title searches on their behalf.

Here the bottom line is that, Justice Longley had already ruled that Horizon Systems had not and did not acquire any title or interest in the 156 acres as a result of the original fraud; thus the issuance of an injunction against it to prevent it from selling any more lots.

At this juncture, then, there is a crying need for those who continue to bay at the Wilson family to cease and desist; and for those who did the harm to the fine folks currently in disputed occupation on lands owned by Arawak Homes to be brought to justice.

November 9th. 2010

jonesbahamas

Bahamas Blog International

Suisse Security Bank and Trust Ltd (SSBT) Loses Privy Council Appeal on Its License Revocation By The Central Bank of The Bahamas

Harajchi Loses Appeal 

By Candia Dames

candiadames@hotmail.com

Nassau, The Bahamas

14 March 2006

...the Central Bank governor was well within his legal rights to shut the bank down.

Saying that it would have been "inconceivable" for the Central Bank governor to have allowed Mohamad Harajchi’s Suisse Security Bank to continue operating, the Privy Council yesterday rejected the bank’s bid to have the decision of then governor Julian Francis overturned.

The high court said that SSBT’s audited accounts and its most recent quarterly reports to the Central Bank were "evidently erroneous".

"SSBT did not have cash on hand and in banks in the sums stated," said the ruling, which was written by Lord Mance.

The ruling said "the state of affairs disclosed by the evidence before their Lordships makes it inconceivable that SSBT could be allowed to continue as an operating bank", and the high court said it saw no basis on which to set aside or remit the governor’s decision to revoke SSBT’s licence and dismissed the appeal.

The bank’s licence was granted on July 20, 1993, and on March 5, 2001, Mr. Francis gave notice that he was of the opinion that the licence should be revoked on the ground that SSBT was carrying on its business in a manner detrimental to the public interest and to the interests of its depositors and other creditors.

Also on March 5, 2001, the governor appointed Raymond Winder as receiver of SSBT, but Mr. Winder had been unable to share the bank’s assets among its depositors and creditors because the appeal had been outstanding.

Mr. Harajchi had appealed a June 29, 2004 decision from the Court of Appeal, which dismissed an appeal filed as a result of the April 25, 2003 ruling handed down by Justice Austin Davis.  Justice Davis refused to overturn Mr. Francis’s decision to revoke the licence.

In a press release issued yesterday after the ruling was handed down, the Central Bank said it will take immediate steps to have Mr. Winder (now the provisional liquidator) appointed as liquidator of SSBT so that the company may be wound up and its assets duly distributed.

Attorneys for SSBT had argued before the Privy Council that by suspending, then revoking SSBT’s licence, the governor acted in breach of an interlocutory injunction granted by Justice Hartman Longley on March 2, 2001 in separate judicial review proceedings commenced by SSBT against the governor on February 22, 2001.

They had also argued that the governor, in breach of principals of procedural fairness, failed to give notice to SSBT prior to or on March 5, 2001 that he was minded to suspend its licence on the grounds on which he actually suspended it on that date, together with an opportunity to respond before he took any such step.

The third issue that the Privy Council considered was whether the governor, in breach of principals of procedural fairness revoked SSBT’s licence on April 2, 2001 on grounds different from, or additional to, those of which he had given notice on March 5, 2001, without giving SSBT an opportunity to respond to such new grounds, and in circumstances in which he did not regard the grounds of which he had given notice on March 5, 2001 as justifying such revocation.

In outlining the facts of the case, the ruling said during the second half of 2000 and early 2001 the Central Bank in correspondence and meetings insisted to SSBT that SSBT should as quickly as possible attract a significant institutional shareholder, that it should maintain a ratio of deposits to capital of 5 to 1 and that SSBT should commission a special audit of its debit card activities.

The ruling said it is the requirement to maintain the 5 to 1 ratio that was "particularly relevant" to the appeal before the Privy Council.

In a letter dated May 6, 1993, which preceded the issue of the bank’s licence, the Central Bank said that the ratio was the first "prudential norm" to which SSBT was to adhere.

The ruling said that as at September 30, 1999 SSBT’s audited accounts showed shareholders funds of $5,891,280.

In a note headed "contingency", the ruling said, SSBT had disclosed a United States judgment and stated that SSBT was appealing, but that it had paid $1.6 million into a trust account and that ‘the bank’s principal shareholder has committed to underwrite any potential loss resulting from this matter’.

In July 2000 the Central Bank sought explanations regarding SSBT’s apparently increased profitability shown by its quarterly return as at March 31, 2000 and a Visa debit card operation, about which it had not previously been informed and of which it feared use might be made by criminal elements for money laundering.

The ruling also said that at a meeting between Mr. Francis and Mr. Harajchi on August 21, 2000, the governor also objected to SSBT’s ownership being in the hands of a single family, the extent of 77.5 percent of its share capital, and urged the introduction of a significant institutional shareholder, which Mr. Harajchi refused.

The Central Bank ordered SSBT to find such a shareholder within six months.  It also confirmed its concern about SSBT’s Visa operation.

The Central Bank also ordered SSBT not to exceed the 5:1 ratio pending introduction of a credible institutional shareholder, but the ruling said SSBT soon exceeded the ratio.

On December 7, 2000, the governor expressed his disappointment in the bank’s failure to respect the Central Bank’s directive with regard to a prudential limit of $30 million it had placed on customer deposits and other funding activities, even though Mr. Harajchi had agreed to this limit and cautioned that "it is a very dangerous strategy to violate limits placed on the bank" and that "this clearly indicates as a complete failure to monitor our limit placed on the bank".

The ruling then goes into a lengthy series of correspondence between the parties, determining ultimately that based on the bank’s state of affairs, the Central Bank governor was well within his legal rights to shut the bank down.

The Privy Council said that the parties involved in the appeal have 14 days in which to make submissions in writing on costs in light of its opinion.

Suisse Security Bank & Trust Ltd (SSBT) Loses its License Revocation Appeal

High Court Explains Why It Dismissed Suisse Security Bank Appeal

 

By Candia Dames

candiadames@hotmail.com

Nassau, The Bahamas

15th November 2004

The Governor of the Central Bank acted in conformity with the law when he revoked the license of Suisse Security Bank & Trust Ltd. (SSBT) more than three years ago, the Court of Appeal says in its newly released written response to SSBT’s appeal.

The high court on June 29, 2004 reaffirmed the 2003 judgment of Supreme Court Justice Austin Davis who ruled that SSBT failed to prove any grounds of its appeal.

Controversial Iranian businessman Mohammed Harajchi, who is still fighting to get his license back, owns the bank.

The Governor revoked the bank’s license on April 2, 2001 after determining that SSBT was carrying on its business in a manner detrimental to the public interest and the interest of its depositors or other creditors.

In the written response, Justice Milton L. Ganpatsingh said despite the submission of SSBT, the Governor could not have been acting in bad faith when he revoked the license.

The main reasons stated for the revocation included the failure of SSBT to report that US $1.6 million of its assets had been frozen in a trust account pending the outcome of litigation in the United States; and that US $3 million of SSBT’s assets had been attached in an account at a brokerage firm in New York in an action to which the company was a third party defendant.

These sums together made up 74 percent of the bank’s capital base.

The reasons also included a failure to provide the Central Bank with evidence of collateral to its satisfaction and evidence that the risk presented by the potential loss of US $3 million was covered by insurance.

The Central Bank has also reported that Mr. Harajchi’s bank continuously failed to provide it with a financial statement.

The first ground of appeal brought by attorneys for SSBT was whether the governor’s power to suspend and revoke the license of SSBT was temporarily suspended by an interlocutory injunction granted by Supreme Court Justice Hartman Longley on March 2, 2001.

But the Court of Appeal said this ground for appeal failed because there were more serious issues outside the limited terms or scope of the injunction and the Central Bank still possessed its general regulator powers and was free to act on them.

The second ground of appeal was that Justice Davis erred in holding that the governor’s power to suspend and revoke SSBT’s license was exercised in accordance with the Bank and Trust Companies Act 2000.

SSBT argues that under law, it should have received notice about the revocation and should have been afforded the opportunity to state its objection in writing.  But the court said this was not necessary, as pointed out by the Central Bank, because of certain practical reasons, including preventing loss to depositors and a run on the bank.

SSBT also maintained that the Central Bank Governor failed to give any or adequate reasons as required under law for revoking the license.

But the Court of Appeal, in support of Justice Davis’s view, disagreed.

It pointed out that SSBT had been made aware of all the concerns of the Central Bank and was not only “adversarial, but disingenuous in its response, so much so that it had initiated judicial review proceedings.”

“We do not agree that it was essential for the governor to set out a chronology of events touching and concerning the issues in order to establish that the regulatory demands had not been complied with,” the response from the high court said.

SSBT’s attorneys also submitted that there was no rational basis for the governor’s decision and that he failed to take into account certain important considerations before making his decision.

But the Court of Appeal held that the failure of SSBT to comply with certain regulatory requirements and the failure of the bank to inform the Central Bank of the US litigation involving US $3 million of the bank’s assets were “relevant considerations” in the governor’s determination.

“Both of those failures were as much a fact as the state of one’s digestion and demonstrated conduct which fell below the statutory requirements,” the judgment said.

Another ground of appeal was that Justice Davis erred in law in holding that the Governor did not act unreasonably or abused his power or acted in bad faith.

But the Court of Appeal justices said they can only judge the governor’s conduct in light of the prevailing circumstances.

“In the first place, it was entirely a matter within the Governor’s discretion to decide on reasonable grounds firstly, what would be required to protect the capital base of SSBT in terms of collateral to meet regulatory requirements;

“And secondly, what arrangement it would be necessary to put in place for Central Bank to obtain reliable and full information, which SSBT had failed to provide so far, concerning the US litigations,” the judgment said.

The final ground of the SSBT appeal was that the Supreme Court Justice erred in holding that the notice issued was not unlawful in that an officer of the Central Bank issued it.

But the judgment of the Court of Appeal said, “We do not understand the Governor to have delegated his power to suspend and revoke in the circumstances of this case by virtue of the fact that the notices were attached to a letter signed by an officer of Central Bank.”