The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Grand Bahama Port Authority’s (GBPA) audit chief has demanded an explanation for how the overdrawn balance on the late Sir Jack Hayward’s shareholder loan account ballooned by an “extraordinary” $400,000.

Ian Barry said he was concerned how the sum owed by Sir Jack to the GBPA’s affiliate, Port Group Ltd, had increased by $300,000 over just a two-month period in mid-2015.

Mr Barry, who chairs both the GBPA and Port Group Ltd audit committees, alleged that he was subsequently informed by the companies’ chief financial officer that the increase was due to $420,000 worth of payments made to Bahamian attorney, Andre Feldman.

Emphasising that there was no suggestion of impropriety by either Mr Feldman or GBPA/Port Group Ltd staff, Mr Barry nevertheless argued that “proper explanation should be made” for these payments.

Mr Feldman has emerged as a key figure in the renewed dispute that erupted within the Hayward estate, following the removal of Mr Barry and Richard DeVries as trustees in mid-May 2015.

He and ex-GBPA chairman, Hannes Babak, engineered that move, which left Prometheus Services Ltd - a company they subsequently admitted to owning - as the sole guardian looking after the Hayward trust and its main asset - the 50 per cent equity stake in the GBPA and its Port Group Ltd affiliate.

Mr Barry, in a January 14, 2016, affidavit alleged that Mr Feldman was ‘wearing many hats’ in relation to the Hayward family, acting as attorney for both the trust and Sir Jack’s estate, and as the latter’s executor.

He further claimed that following his removal as trustee, Mr Feldman instructed that statements for Sir Jack’s shareholder loan account be sent to himself, rather than Sir Jack’s office.

“I should mention some events which are causing me concern and of which a proper explanation should be made,” Mr Barry, the ex-GBPA chief financial officer, alleged.

Acknowledging that Sir Jack had owed Mr Feldman “a substantial sum of money” in legal fees and expenses, Mr Barry explained how the former’s shareholder loan account with Port Group Ltd worked.

“If he was off the island or in need of funds, he would have requested Port Group Ltd to pay bills on his behalf,” Mr Barry alleged of Sir Jack. “For clarity, the St Georges had a similar arrangement.

“At the end of Port Group Ltd’s financial year (October 31), the shareholder’s loan account would either be set off against monies within the group due to the trustees, or be settled from resources that Sir Jack would find elsewhere, usually the former.”

Mr Barry alleged that Sir Jack had authorised him to pay Mr Feldman $10,000 per month from the start of 2014, so he could cover his fees.

“However, after I was removed as a trustee, Mr Feldman approached me in June saying that he needed the payment of $10,000 per month to continue as before,” the ex-GBPA chief financial officer said.

“I responded that I was no longer a trustee, and therefore I no longer had authority to authorise such payments.”

Mr Barry said that a month later, in his capacity as audit committee chair for both companies,he was putting together recommendations to settle the sums due on the shareholder’s loan accounts to Port Group Ltd.

He was told by the GBPA’s chief financial officer that the sum owed by Sir Jack as at July 2015 was around $100,000.

“To my surprise, when looking at the Port Group Ltd reconciliations on September 10, 2015, in anticipation of the dividend that would be declared at the September Board meeting, I noted that the overdrawn balance on the Hayward shareholder’s loan account had increased by an extraordinary amount of nearly $400,000,” Mr Barry alleged.

“I immediately asked the chief financial officer for details of the increased amount. The chief financial officer told me that the increase was the result of two payments of $30,000 and $390,000 made to Mr Feldman.

“I do not know what basis or justification was given for these payments, but there was no suggestion from the chief financial officer that they were unauthorised.”

Mr Barry also claimed that in June-July 2015, he was asked for a copy of Sir Jack’s shareholder loan account by the latter’s companion, Patty Bloom.

“I told her that it was sent each month to Sir Jack’s office and could be obtained from there,” he claimed. “When the statements could not be located at Sir Jack’s office, I inquired as to the reason why not.

“The chief financial officer told me that after my removal and Mr DeVries’ removal as trustees, Mr Feldman has issued instructions that such statements were to be sent to him.”

Mr Babak and Mr Feldman previously claimed Messrs Barry and DeVries were negotiating “silly deals” to sell the GBPA/Port Group Ltd, involving a price, and purchase structure, that was not in the Hayward trust’s best interests.

They cited this as their rationale for engineering the duo’s removal, but this has been refuted by both Mr Barry and Mr DeVries.

Their affidavits imply that Messrs Babak and Feldman used the negotiations with $4.56 trillion asset manager, BlacKRock - and subsequent claims - as a pretext to ensure they were removed as trustees.

They then engineered matters to their advantage such that any purchaser of the Hayward family’s GBPA interest must negotiate with and/or be brought to the table by themselves - to the exclusion of all others.

Mr DeVries had pointed out that Messrs Babak and Feldman immediately picked up ‘where they had left off’ with BlackRock following his and Mr Barry’s removal as trustees.

As a result, the GBPA’s fate - and that of Freeport, its 60,000 residents and the city’s future development - rested very much in the duo’s hands until the Hayward children and grandchildren successfully persuaded the Supreme Court to replace them with Judicial Trustees.

Meanwhile, Mr Barry alleged that Mr Babak “quite vigorously” promoted a potential GBPA purchaser whom he subsequently denied had agreed to pay him a Finder’s Fee.

Mr Babak, in an interview with Tribune Business last year, slammed as “nonsense” documents purporting to show he, and others, would have received ownership stakes in key Freeport utilities as ‘Finder’s Fee’ compensation over the (GBPA) sale.

That came after this newspaper obtained documents showing that a company, called Bahamas Overseas Holdings, would have been handed Port Group Ltd’s equity stakes in the likes of Sanitation Services and Grand Bahama Utility Company if the Kell Ryan/Highgrove Securities bid to acquire the GBPA had succeeded.

Mr Barry, in his recent affidavit, alleged: “In January 2015, Mr Babak spent an hour in a meeting with me at Fort Lauderdale discussing a possible sale to Highgrove, and he never revealed to me that he had sought - or was seeking - a Finder’s Fee from Highgrove.

“He did promote Highgrove as possible purchasers quite vigorously during this meeting.”

Mr Barry’s affidavit refers to the same documents obtained by Tribune Business, and which have now been filed with the Supreme Court.

A‘Finder’s Commission Agreement’, dated September 24, 2014, refers to ‘Project Grand Bahama Sunrise’ - the same name used by Highgrove Securities, a UK-based boutique investment house, and Mr Ryan, a member of the family that founded the world-famous Ryanair airline.

Bahamas Overseas Holdings, which is incorporated in the Cayman Islands, is described in the unsigned agreement as ‘The Finder’ that has “introduced Hawksbill to the project on Grand Bahama” - the acquisition of the Hayward and St George family equity interests in the GBPA and Port Group Ltd.

The assets that formed the ‘finder’s fee’, and would have been transferred to Bahamas Overseas Holdings, are the 100 per cent equity stakes held by Port Group Ltd in Grand Bahama Utility Company (the city’s water supplier) and Freeport Commercial & Industrial.

And the 50 per cent equity stake in Sanitation Services, and 20 per cent holding in the Grand Bahama Shipyard, would also have been heading Bahamas Overseas Holdings’ way had the Ryan/Highgrove Securities offer succeeded and the ‘finder’s fee’ been agreed.

Mr Barry said the finder’s fee agreement and its contents had never been revealed to him, adding that the assets involved were “valuable”.