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EMBD’s ‘Cartel Case’ against 5 Contractors to Proceed

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By Prior Beharry

JUSTICE James Aboud has dismissed the preliminary applications brought by five contractors alleged to be part of a cartel along with former government minister Dr Roodal Moonilal and former high ranking officials of the Estate Management and Business Development Company (EMBD).

Justice James Aboud

In a 122 -page judgment on Thursday, the judge said a sixth contractor LCB Contractors Limited did not have a case to answer.

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It now means that the claim made against the contractors –  TN Ramnauth and Company Limited, Kall Company Limited, Mootilal Ramhit and Sons Contracting  Limited, Fides Limited, Namalco Construction Services Limited -, Moonilal and others will proceed and the contractors, Moonilal and the others would have to filed their defences.

Shortly before the general election in 2015, EMBD entered into contracts with the said contractors to pave ten former Caroni roads as well as to carry out infrastructural works at two residential developments in McBean, Couva and Diamond Village.

The contractors were paid over  $200 million and then three of them sued EMBD for amounts alleged to be outstanding under those contracts. EMBD then counter claimed against those three and brought a separate claim against the remaining contractors and other parties alleged to be part of the cartel arrangement.

EMBD alleged that Dr Moonilal obtained cabinet approval to secure a $400 million loan from First Citizens in order to finance the project. The value of the contracts eventually awarded to the contractors was over $400 million.

The company alleged that the contractors came together to decide which one of them will win which of the ten contracts at over inflated prices.

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It further alleged that although LCB did not win any of the ten contracts, that it will be rewarded by the other contractors. The judge did not find favour with this argument and threw out EMBD’s claim against LCB.

EMBD also claimed that the roads were worthless and of no value.

Earlier this week, Justice Aboud was asked by Ramesh Lawerence Maharaj, SC, lead attorney for four of the contractors to not deliver his judgement until after the August 10 general elections. The judge refused his request.

Justice Aboud said, “In my opinion, the pleaded case leans heavily towards fraud and conspiracy, and away from innocence or negligence.

He added, “It would take an assortment of mirabilia to explain the pleaded facts as not involving fraud and conspiracy.”

The judge said the case against former EMBD chief executive officer Gary Parmassar “is the strongest among all of the cases.” Parmassar was the CEO of EMBD at the time of the awards of the contracts.

Justice Aboud said, “EMBD contends that the close relationship is apparent from the SMS and other messages that were exchanged between Mr Parmassar and Mr Ramnauth (of TN Ramnauth).”

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He said, “I should note that in a free market TN Ramnauth is to be properly regarded as a company with as equal an opportunity to win a tender as any other contractor in the marketplace. An unseemly or comradely relationship, or an ‘inside track’ with key decision-makers may raise an inference at the trial that the market is not free and that the special relationship yielded undeserved rewards.”

Justice Aboud said, “Someone has to explain at the appropriate time how these unusual patterns, oddities and inconsistencies can exist other than by means of collusion by contractors.”

He said, “In the case before me, the EMBD Contractors, being corporate entities cannot be said to be running on autopilot.

“The facts and circumstances pleaded by EMBD, especially regarding the patterns, oddities, and inconsistencies in the tender bids, the text messages between Dr Moonilal/Mr Taradauth Ramnauth and Mr Parmassar, and the haste in which the overpriced bids were prepared, the inferior works executed and the exorbitant payments made, reveal the existence within the EMBD Contractors of a governing or operating mind and will that (sic) cannot reasonably be explained at this interlocutory stage as purely accidental or the result of innocence or negligence.

“Clearly, agents or principals were directing the EMBD corporate entities to sign overpriced tender bids, to supervise the execution of inferior works, and to receive vast sums of money.”

Justice Aboud said, ”

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TN Ramnauth, Kallco, Motilal Ramhit and Fides were represented by Senior Counsel Ramesh Lawrence Maharaj, Jagdeo Singh, Kiel Taklalsingh and Jamie Maharaj.

Anand Ramlogan, SC, Alvin Pariagsingh and Ganesh Saroop represented Moonilal while attorney Dexter Bailey represented Parmassar.

Lynette Maharaj, SC, appeared for LCB Contractors. Attorney Jayanti Lutchmedial represented engineer Andrew Walker and Roger Kawalsingh and Javed Mohammed represented Namalco.

EMBD was represented by David Phillips, QC, Jason Mootoo, Tamara Toolsie and Savitri Sookraj-Beharry.

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