Government announces Committee to process Baha Mar claims
On August 22, 2016, the Supreme Court approved the plan to remobilize the stalled Baha Mar resort and one week later on Sunday, 28th August 2016, the government announced a committee to settle severance payments owed to displaced Baha Mar workers and to process claims by unsecured Bahamian creditors
The members of the Committee are: His Excellency Mr. James Smith CBE; Mr. Grant Lyon (Liquidation Claims Advisor to the Government); Ms. Yanping Mo (representative of the Bank); Mr. Norbert Chan (representative of Deloitte); and Mr. Tiger Wu (representative of CCA).
According to the press release, these claims are being paid from monies which have been made available by the Bank, as the Baha Mar companies in liquidation have no assets from which to pay creditors. The Bank will shortly place on deposit in The Bahamas the funds necessary for the work of the Committee; to settle the Bahamian employees’ related claims as outlined by the Prime Minister during his address to the Nation on August 22nd; and to administer and pay the claims of Bahamian creditors, according to the process which has been indicated.
Further announcements on the specific details of the process will come from the Committee. The Government stated that it hoped that Bahamian employee claims will be settled no later than 30th September 2016 and that all other claims will be dealt with on or before 31st December 2016.
This day in The Bahamas Parliament (31st August 2016)
The Bahamas Parliament met on Wednesday, 31st August 2016 to mainly debate an amendment to the Securities Industries Act (SIA) 2015. The amended bill seeks to bring greater clarity to the role of the Commission, specifically at it relates to hearing and ruling on commercial disputes. Leading off the debate was State Minister for Finance the Hon. Michael Halkitis
Currently, the SIA’s enforcement regime allows the Commission to pursue one of three courses of action in resolving matters of discipline. The avenues are the judicial process or the courts, an independent hearing panel established by the Securities Commission or through a direct settlement between a licensee or registrant and the Securities Commission. Issues of criminality are referred to the Office of the Attorney General for prosecution.
Under this amendment, the commission is empowered to select a wholly independent panel with the specific mandate of hearing and ruling on specific commercial matters. These amendments close gaps in the Commission’s supervisory and disciplinary regime. By amending section 33(2) of the Bill, the new Bill repeals the requirement that any panel established by the Commission must include a member of the Securities Commission. The Hearing Panel is “empowered by the Commission to adjudicate matters of discipline arising in relations to breaches of the Securities Industries Act” said Halkitis.
The Bill was seconded by Financial Services Minister the Hope Strachan who delivered the second reading and commended the Bill to the House.
Matters arising under the agenda item STATEMENTS BY MINISTERS are as follow:
Prime Minister the Rt. Hon. Perry G. Christie updated Parliament on the deal his government negotiated with the China EXIM Bank and China Construction of America to complete the Baha Mar project and make whole all outstanding financial claims against the project by public corporations, former employees and unsecured Bahamian creditors. According to Mr. Christie, displaced employees will receive all of their severance pay, pension contributions, vacation pay, pay in lieu of notice of termination and NIB contributions will be paid. Payments to employees are expected to be completed by 30th September and payments of claims submitted by unsecured Bahamian creditors are expected to be completed by the end of 2016. Additionally, monies owed to Bahamas Power and Light (BPL) will be paid as part of the agreement.
Responding to critics, Mr. Christie reiterated that the China EXIM Bank requested the documents sealed until the transactions are fully executed and argued that this is a normal practice in business with agreements of this level of market sensitivity, difficulty and financial value especially given the financial losses suffered by the EXIM Bank in this project to date. Further, the Prime Minister pointed out that business deals of this magnitude are not negotiated in the media.
On the issue of wild speculations on concessions offered to CCA, Mr. Christie repeated that the CCA was given concessions similar to those approved to them by the former Free National Movement government. He also cited the limitations of the Bahamas government in negotiating concessions to investors because no concession could surpass those approved for the Atlantis Resort.
Minister of Youth, Sports and Culture the Hon Daniel Johnson informed the House that The Bahamas secured the rights for the IAAF World Relays for 2019 and 2021 in addition to hosting this event in 2017. In offering congratulations Minister Johnson recognized the country’s entire Olympic team, TEAM BAHAMAS, former 400m world, Olympic and Senior CAC champion Tonique Williams Darling, and singled out Olympic champion at 400m Shaunae Miller and our men’s 4x400m relay team who secured the bronze medal in Rio. The honourable member for Bamboo Town, Renward Wells brought congratulatory remarks from the official opposition.
Minister of Social Services and Community Development the Hon. Melanie Griffin tabled a copy of the full Household Expenditure Survey 2013. The Minister pointed out that a Living Conditions Survey for The Bahamas was conducted in 2001, but more current data was needed to inform public policy on living conditions in The Bahamas. She mentioned the proposed National Health Insurance (NHI) Plan, the Conditional Cash Transfer program, R.I.S.E. amalgamated with the uniform and food assistance program through a single debit card and a shared vision for and comprehensive approach to education as some of the policy initiatives advanced by the government to improve the lives of all Bahamians.
The standing committee on privilege was activated to investigate whether or not the Parliamentary privilege was breached in connection with the tabling Save the Bays emails in the House and to determine if there is evidence that the emails came into the possession of parliamentarians improperly as the court concluded.
Speaking to the press earlier this week, State Minister for Finance confirmed that homeowners who suffered through foreclosures and managed to secure another mortgage on a different home will be eligible for stamp tax waiver on this new residential property.
As the public debate over the controversial Letter of Intent (LOI) rages on, Long Island MP Loretta Butler-Turner said Bamboo Town MP Renward Wells has an obligation to explain the full extent of his involvement in the signing of the LOI that led to his termination as Parliamentary Secretary in the Ministry of Works and his subsequent resignation from the parliamentary caucus of the Progressive Liberal Party. When questioned about the LOI, opposition leader Dr. Hubert Minnis was initially quiet but late this week said that Well’s explanation back in 2014 was satisfactory and he now fully understands Wells’ involvement.
Former Bahamas Contractors Association (BCA) President Stephen Wrinkle and current president Leonard Sands expressed different views on whether a BCA member should sit on the committee established by the Baha Mar stakeholders to process claims submitted by both former unsecured Bahamian creditors. Mr. Wrinkle believes that contractors engaged on the project should have a representative on the committee but Mr. Sands believes that the contractors should not stick their noses into what he called a “private business arrangement.” Both men however are taking a “wait and see” approach to the work of the committee.
Chairman of that special purpose vehicle (SPV), Resolve Bahamas, James Smith told the media this week that a report summarizing the work of the committee over the past year is complete and will be presented to the government “soon.” Resolve was established in October 2014 to hold $100 million in non performing loans from the Bank of the Bahamas to allow it to return to compliance with Central Bank regulations on statutory capital ratios. During the operational phase, properties underwent valuations that were compared against the bank’s book value and a number of properties were advertized for sale and are at various stages of being sold.
John Pinder Jr., the twenty-seven year old son of Public Service Union chief John Pinder Sr. was murdered Monday evening at his home by persons unknown sometime around 10pm. A grief stricken John Pinder Sr. said “you feel it more when it hits home.” He said his son was a good boy who was not involved in questionable activities.
Fred Mitchell, the incumbent MP for Fox Hill launched his re-election campaign for that seat on Tuesday night at the Faith Mission Church of God in Fox Hill. Thankful for the opportunity to serve again, Mitchell committed himself to assisting the youth in bringing their communication skills on par with their tremendous athletic talents. In addressing the high level of rejection of our youth who apply for visas to attend high schools in the United States, Mitchell told those gathered that in addition to dissatisfaction with the school operations, many of the young applicants are rejected because they are unable to satisfy the US consul officer of why they want to attend high school in the United States.
Saying that many will have much to say about his decision and will be disappointed, FNM candidate for the Bain and Grants Town constituency Leonard Sands announced that he had ended his pursuit of front line politics for “personal reasons.” This announcement came on Tuesday, more than one month after he suspended his campaign.
Deputy Assistant Secretary for Energy Diplomacy in the U.S. Department of State’s Bureau of Energy Resources, Robin Dunnigan visited The Bahamas this week and while here, she paid courtesy calls on the Bahamas Deputy Prime Minister and Minister of Works and Urban Development the Hon. Philip Davis and Minister of the Environment and Housing the Hon. Kenred Dorsett at their respective ministries. Ms. Dunnigan was accompanied by U.S. Embassy Charge d’Affaires Lisa Johnson on those visits. In an interview with the Nassau Guardian, Dunnigan touted the energy reform initiatives being taken by The Bahamas as necessary in becoming a regional leader in the energy sector. One of those steps taken was ratifying the Paris Agreement and committing The Bahamas to ensuring that thirty percent of its energy source would be renewables. She also said that US energy firms are “chomping at the bits” to enter the local solar energy market as soon as the government goes out to tender for solar power generation, US companies will be encouraged to compete for the business.
CEO of the Bahamas Chamber of Commerce and Employers’ Confederation Edison Sumner said this week that the credibility of Prime Minister Christie is on the line with his 22nd August announcement of a deal with the China EXIM Bank and the China Construction of America to complete the stalled Baha Mar project and the compensation of employees and unsecured Bahamian creditors. This is fair in light of repeated announcements by the Prime Minister but if and when the payments are made and the project remobilized, would the Chamber Chief opine to the media that the Prime Minister lived up to his word and has credibility? He should in the interest of fairness and balance.
Facing the reality of an imminent liquidity crunch and the real prospect of a rate hike, Minister with responsibility for the National Insurance Board the Hon. Shane Gibson said that “the question is not if we have to do something, it is when.” He was referring to the ILO’s recommendations of a rate hike in its 10th Actuarial Review of the National Insurance Board (NIB). The report found that the current 6.2% contribution rate was insufficient to sustain the board beyond 2029.
The Bahamas Supreme Court on Thursday quashed the 2013 death sentence of Kofhe Goodman, the man convicted of the 2011 abduction and murder of 11 year old Marco Archer; the court ordered a new trial as soon as possible. The Appeals Court ruling comes amid charges that pre-trial publicity, the behavior of the defense and jury irregularities prejudiced the defendant who did not get a fair trial. Although eligible for bail, Wayne Munroe attorney for Goodman, said he “cannot imagine a successful bail application” if a retrial is scheduled within a reasonable time frame. Archer, a resident of Brougham Street, left home to go to the candy store and was never seen alive again. His partially decomposed body was discovered behind a building in the western district of Nassau days later. This resulted in Marco Law and the Marco Alert System.
Tourism Minister the Hon. Obie Wilchcombe told the media on Wednesday that the diligence of the government in enforcing the new gaming laws of the country has resulted in the closure of some 200 web shops. He said that the government is keen not to have the proliferation of gaming houses near schools, communities and churches. Wilchcombe also revealed that the due diligence work of the Gaming Board is nearing completion and that regulatory body should submit a report with recommendations of who should be awarded gaming licenses to operate web shops.
In a letter addressed to Prime Minister Christie, former Exuma MP George Smith offered himself for consideration as a candidate for the Exuma and Ragged Island constituency. Smith said that he was encouraged by Exuma residents to serve for a portion of one term to assist in building a cordial relationship between the central government and Exuma.
FNM Member of Parliament for North Eleuthera the Hon. Theo Neilly confirmed this week that he is bowing out of front line politics and would not be seeking the party’s nomination for the upcoming general elections for “personal reasons.” “I had to go through the process, meet with my family at several family gatherings, thinking it through and making sure it’s the right decision” said Mr. Neilly.
The Democratic National Alliance staged an “unseal the deal” demonstration at the East Street Hill Post Office and in Rawson Square on Wednesday. Mr. McCartney argued that the deal is not actually a deal and that the Christie administration has been “untruthful” with the Bahamian people. It is important to note that the only public component of the agreement to remobilize Baha Mar is the concessions given to the China Construction of America (CCA) are similar to the concessions given to them by the former Ingraham administration under the terms of the Hotel Encouragement Act. Typically these types of concessions allow for duty free importation of construction and building materials. The other aspects of the deal are between private interests – the China EXIM Bank, the potential buyer and CCA. Much of the back and forth in the press about a government secret deal and demonstrations are much ado about nothing – a fabricated storm in a tea cup if you will. CCA will be allowed to import 2x4 lumber, plywood, pvc pipes, fittings, tiles, thin set, grout etc all duty free – raw materials necessary to complete the project just like the people in hurricane ravaged Long Island and Acklins; Prime Minister Christie has been very clear about that. The big important deal Bahamians need to watch out for is the heads of agreement to be negotiated between the government and the new buyer of the project and the new casino operator. China EXIM Bank has not selected a buyer as yet according to Prime Minister Christie.
With eight confirmed cases of Zika infection and a number of suspected cases under investigation, Health Minister Dr. Perry Gomez said that the government is awaiting more information before the public can be updated on the current status of level of Zika viral infections in The Bahamas. Extensive spraying and an aggressive public education program continue to mitigate public health risks associated with the Aedes Aegypti mosquito, the carrier of the virus.
Bahamasair advised the general public on Thursday of a fraudulent scheme they uncovered involving individuals offering unauthorized, deeply discounted tickets on Bahamasair. The scam was turned over to the police and Bahamasair further advised all customers to purchase all Bahamasair tickets from its approved sales channels (Palmdale ticket office, Oakes Field ticket office, Freeport ticket office, all airport counters, and authorized travel agencies). All tickets purchased outside of these approved channels will be denied for travel said the statement.
Chairman of the Bahamas National Festival Commission (BNFC) Paul Major confirmed on Thursday that the full financial report on the 2016 Bahamas Carnival has been completed and submitted to the “principals” meaning the government. There were those who were made to believe that the report would be made public on Thursday of this week based on pronouncements attributed to Tourism Minister the Hon. Obie Wilchcombe.
Confirming that there have been no cancellations due to the Zika outbreak, Tourism Minister Wilchcombe told the media this week that his ministry will meet with industry stakeholders to discuss preventative measures against the Zika virus. Mr. Wilchcombe supports a regional funding effort to support preventative measures to protect the industry. Using Disney world as an example, Wilchcombe said various properties at Disney World, including Universal Orlando Resort and SeaWorld have supplied mosquito repellent spray and lotion to protect their guests. “The country has to adapt to a ‘state of emergency’ so that we are fighting to ensure prevention” said the Minister.
In its July 2016 Monthly Economic and Financial Development Report, the Central Bank expects an economic boost for the remainder of 2016, especially in the areas of construction and room occupancy in the wake of the announcement of the remobilization of the $3.5 billion Baha Mar resort. Prime Minister Christie said that his government will work assiduously to ensure that the casino, the casino hotel, the convention center and its hotel and the golf course will all be opened by the end of the 2016/2017 winter season.
Expressing surprise at the recent sovereign rating downgrade of The Bahamas by Moody’s, CEO of the Chamber of Commerce and Employers’ Confederation Edison Sumner urged both government and opposition forces to articulate their plans to get the country out of its current “economic doldrums” as he called it. It was not enough to stand on the outside and criticize said Sumner “but it’s also important for the opposition parties to demonstrate that they also have a plan to get us out of this situation and show how they can improve and grow the economy.”