The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Baha Mar’s joint provisional liquidators are terminating employees who have been ‘double dipping’ by continuing to pocket a regular pay cheque despite finding another job.

Tribune Business sources yesterday confirmed that the joint Bahamian-UK provisional liquidation team had been conducting “verification checks”, using National Insurance Board (NIB) contributions, to catch Baha Mar staff who have been pocketing two pay cheques.

It is uncertain how many employees have been caught, and terminated, and two of the joint provisional liquidators failed to respond to Tribune Business e-mails seeking comment before press deadline last night.

However, accountants and attorneys who advise corporate clients revealed to this newspaper that some former Baha Mar staff have been asking their new employers to break the law by not filing/submitting NIB contributions on their behalf.

These requests have been prompted by fears that two NIB payments on their behalf will expose the ‘double dipping’ - fears that are now being realised.

One professional executive, speaking on condition of anonymity, confirmed to Tribune Business what was happening, and said: “They’ve [the joint provisional liquidators] started terminating those employees.

“The new employer cannot play that game. They have to file with NIB. The employees are going to them to say: ‘Don’t pay NIB’. We say: ‘You can’t do that’.

“The employees have to decide which company they want to be with: A company that could soon be in full liquidation, or a company with continuing operations.”

Sources familiar with the situation at Baha Mar, which is under the control of the Bahamian-UK joint provisional liquidation team, confirmed to Tribune Business that “they have been terminating people” for so-called salary ‘double dipping’.

“I know they [the joint provisional liquidators] were asking a lot of questions about that, and checking with people,” the source, speaking on condition of anonymity, told this newspaper.

Another contact, also speaking anonymously because they were not authorised to speak to the media, confirmed that the joint provisional liquidators had been carrying out “verification checks” to determine if Baha Mar employees had taken other jobs.

They were unaware, though, of any terminations as a result.

Tribune Business, though, was told that offending employees were being called in to receive termination letters. There were also suggestions that the joint provisional liquidators were demanding that the Baha Mar salary payments be repaid, although that could not be confirmed.

Neither Ed Rahming, the Bahamian accountant and partner at KRyS Global (Bahamas), nor Alistair Beveridge, the Alix Partners accountant, who are both joint provisional liquidators, returned Tribune Business’s e-mails seeking comment.

However, it is no surprise that increasing numbers of Baha Mar’s 2,400 Bahamian employees are seeking employment elsewhere, given the continued uncertainty over the $3.5 billion project’s fate - especially whether it will be placed into full liquidation, under the Supreme Court’s supervision, on November 4.

These workers have to look out for their own, and their family’s, financial well-being, and concerns about how the joint provisional liquidators could monitor whether salaries were still being paid to staff who had found other jobs have been raised previously.

Up until end-September 2015, Baha Mar staff were being paid from the $21 million-plus owed by the Government to its initial developer, Sarkis Izmirlian, for the West Bay Street re-routing and associated infrastructure works.

The joint provisional liquidators, in subsequent Supreme Court filings, gave every indication of an intention to continue paying Baha Mar staff what was due to them up until the November 4 winding-up petition hearing.

Mr Rahming, in documents filed with the Supreme Court on September 24, disclosed that the joint provisional liquidators had located $10.342 million in cash assets upon taking control of the seven Baha Mar companies on September 4.

Apart from a total $842,000 that remained in the companies’ combined bank accounts, Mr Rahming said the only other source of liquid cash available to them was the remaining $9.5 million balance of the ‘roads’ money owed to Baha Mar by the Government.

That has now been transferred by the Government to bank accounts controlled by the joint provisional liquidation team.

“The roadwork sum and available cash of approximately $842,000 found in various bank accounts of the companies are the only cash that the liquidators have to pay employees, maintain existing operations, preserve the value of the assets of the companies and defray provisional liquidation costs,” Mr Rahming alleged.

“The joint provisional liquidators estimate that the costs of funding the insurance and other costs of maintaining and preserving the assets of the seven entities, the payroll costs and critical supplier costs, is significantly in excess of the cash currently in their possession.

““In order to defray the costs, excluding the insurance costs, to maintain and preserve the assets of the seven entities in provisional liquidation, the joint provisional liquidators require authority to borrow up to the sum of $16.262 million.

“By granting the joint provisional liquidators the authority to borrow this sum, we verily believe that we will be better able to comply with our mandate under the provisional liquidation orders to preserve the assets of the companies.”

Meanwhile, Tribune Business familiar with developments expressed doubt that the parties to the Baha Mar dispute - Mr Izmirlian, China Construction America, the China Export-Import Bank and the Government - would reach a commercial resolution before the November liquidation hearing.

And they suggested that, should Baha Mar be placed into Supreme Court-supervised liquidation, then the $3.5 billion project would be unlikely to open until December 2016 at the earliest.