The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A frustrated Bahamian businessman has revealed how his family’s home and well-being have been threatened by the government’s failure to “honour a contract” now owing him at least $30m.

Kingman Ingraham told Tribune Business he is uncertain how badly “scarred” his wife and son are after the almost five-year battle over the government’s alleged lease agreement breaches forced them out of their Camperdown Heights home.

Having sealed what he thought was an iron-clad, irrevocable deal for the Department of Public Health to rent the former Kelly’s Warehouse property on Soldier Road in December 2014, Mr Ingraham said his project company, Teetering Investments - and his family - were thrown into “disarray” when it did not move in and begin making rental payments as stipulated by the contract.

Having borrowed $9m to acquire the property and upgrade it according to the Department’s demands, Mr Ingraham said the loss of the anticipated seven-year rental income stream left his investment and family home exposed to his lender as both had been pledged as loan security.

The financier, the Lowe Group of Companies, which was then-headed by the late William “Billy” Lowe, ultimately initiated legal proceedings to appoint a receiver for both properties. As a result, Mr Ingraham said the government’s continuing failure/refusal to fulfill its alleged lease obligations has been responsible for forcing his family out of their home for almost three years.

Despite multiple attempts to resolve the matter, including numerous approaches to Cabinet minsters, including K Peter Turnquest, deputy prime minister, and Brensil Rolle, minister of national insurance and the public service, he told this newspaper that all his efforts have been effectively stonewalled by the Minnis administration.

An at-times emotional Mr Ingraham also accused the government of using the legal system and arbitration process to drag the situation out, possibly hoping he would go away or be forced to settle for “cents on the dollar”.

He told Tribune Business that representatives of the Attorney General’s Office had pledged to identify an arbitrator within 48 hours of a November 2018 Supreme Court hearing also attended by his attorney, Wayne Munroe QC, yet failed to deliver on its promise.

Mr Ingraham finally secured the appointment of retired Justice Jeanne Thompson as arbitrator some four months later on March 8, 2019, after petitioning the Supreme Court, but argued that the delays in progressing his claim have not ceased.

He accused the government of failing to abide by the deadline set by the arbitrator to file its evidence and submissions on September 29, 2019, which meant that the November 20 hearing planned before retired Justice Thompson did not take place, thereby halting his claim yet again.

However, Carl Bethel QC, the attorney general, yesterday told Tribune Business that the government’s attorneys had advised him there was “no basis” to support Mr Ingraham’s claim for financial compensation. He added that he was unaware of any delay in the arbitration process, but said he will review the matter in light of the businessman’s claims.

“My instructions by counsel who have reviewed the matter are that he has no basis for a claim,” Mr Bethel said. “He’s invoked the arbitration clause, and ultimately it will be the arbitrator that makes the determination.

“I do not participate in the actual conduct of most of the litigation that goes through my office. If that’s what he says I will review the conduct of the arbitration, but I’m not aware of that.”

Tribune Business understands that Mr Ingraham and Teetering Investments believe they are currently owed around $30m without damages, and potentially up to $45m if these are included. The businessman alleged that some $4.5m in penalties have accrued since the current government took office, with the liabilities owed to him standing at almost $24.5m in May 2018.

An accountant by profession, Mr Ingraham argued there was “no logic” to the government’s stance - especially since the lease agreement’s penalty clause is potentially adding $140,72 per month to the Bahamian taxpayer’s exposure. He added that the situation also threatened his ability to practice as an accountant of 30 years’ standing.

Warning that private sector and entrepreneur confidence in doing business with the government will be undermined by its treatment of himself and others, he said he was not alone as other companies and investors were experiencing similar difficulties to himself and Teetering Investments.

Mr Ingraham thus questioned why the Government preferred to fight instead of exiting contracts and hirings it no longer wanted, arguing that the proper course was simply to negotiate a financial settlement with the other side or pay them what was due under the deal’s terms.

Recalling the emotional swings his family has been put through, he also queried why potential government debts owed to himself and others were not being picked up by the likes of Standard & Poor’s (S&P) and Moody’s and factored into their assessments of The Bahamas’ sovereign creditworthiness.

“It’s almost tearful,” Mr Ingraham told Tribune Business of what he has endured. “For 14 months myself and my wife did not sleep under the same roof with my child. I’ve been put out of my house because of this transaction with the Government. For 14 months.

“My son has not been in my yard at Camperdown from January 13, 2017. Just about every week he drops a line about wanting to go back home. Most marriages would not survive. I do not know what scars I’ve put on my child for entering into a transaction with the Government of The Bahamas.

“You’re supposed to get these scars when you try to invest with Tom, Dick and Harry, not the Government. You take a hit when you deal with Tom, Dick and Harry, but for all the procedures you have to go through with the Government of The Bahamas to get a contract with the treasurer...... How do you do business with a government that does not honour contracts?” he continued

“You are the Government. You’re talking about personal lives. How do you do that? I’m sure I’m not the only person experiencing that. But for the grace of God this would send you crazy. I’ve been able to survive because I have a good wife who has stood with me, keep my son in St Andrews and live fairly comfortably thanks to my professional skills.

“But for someone not able to make money, they would go crazy. I wonder how people survive that may not be professional and have the ability to survive like I have. It’s a lot of pressure that most people can’t take.”

Legal documents seen by Tribune Business make clear that Mr Ingraham and his Teetering Investments vehicle only acquired the former Kelly’s Warehouse building, and obtained debt financing from the Lowe family, because of the signed lease agreement obtained with the Government.

His then-attorney, Campbell Cleare of McKinney, Bancroft & Hughes, wrote in an October 9, 2014, letter to Elizabeth Keju, former permanent secretary in the Ministry of Public Service, warned that “time is of the essence” to complete the lease agreement so that Teetering Investments could close on the property purchase.

The lease, a copy of which has been obtained by this newspaper, was signed on December 23, 2014, at the mid-point of the former Christie administration’s tenure by the Government treasurer - which Mr Ingraham said made it a binding, irrevocable contract regardless of administration changes.

However, Mr Ingraham alleged in an affidavit that the project was placed under immediate “strain” by the then-government’s failure to contribute $1.5m to finance its share of the improvements to the Soldier Road property. This was agreed as a way to save the Government almost $4m over the lease’s duration by eliminating maintenance costs, thereby keeping the rental rate below $25 per square foot.

However, this payment was never received, and Mr Ingraham and Teetering Investments were now faced with conducting “the necessary renovations within six months” to ensure the Department of Public Health could occupy the building by July 1, 2015.

The Christie administration then committed a second lease breach by taking six months to decide how it wanted the building to be customised to meet the Department of Public Health’s needs, instead of the allotted 30 days, “which further pushed the project into disarray”.

Teetering Investments sent the Ministry of Public Service a June 16, 2015, letter detailing how the Government had incurred $1.714m in penalties due to the delays. The Government “accepted responsibility” and Mr Ingraham and his company revised the sum downwards to $1.242m after being promised they would receive “one prompt lump sum payment”.

Instead, Teetering Investments received four instalment payments spread between August 2015 and January 2016, which Mr Ingraham said only served to exacerbate growing tensions with the lender. He added that the late Mr Lowe’s passing in December 2015 “further catapulted the project into disarray, and the family became very frustrated at the pace of progression of the project”.

“The family demanded by June 2016 the project should be regularised,” Mr Ingraham said. “In June 2016, the project was not regularised and the funder requested that the plaintiff [Teetering] seek alternative financing.

“The plaintiff was challenged with finding a lender to pay-out the funder, so in June 2016 the funder commenced legal action to place the Soldier Road property into receivership.” Tribune Business understands that accountant Ricky Chea is the receiver for both the Soldier Road property and Mr Ingraham’s home, but no sale of either has been effected as the value is insufficient to recover the loan.

Mr Chea could not be contacted yesterday, while his attorney, Sean Moree of McKinney, Bancroft & Hughes, declined to comment. He replaced his father, now-Chief Justice Brian Moree QC, who had been acting for the Lowe family prior to joining the judiciary.

Still, Mr Ingraham told Tribune Business that the penalties, as well as the Government’s $390,625 payment in January 2015 of a first and last month’s rent, as well as a security deposit, showed it recognised there was a binding lease deal despite its failure to move in and make subsequent rental payments.

“There’s no question about acknowledging the contract,” he said. “They’ve breached the contract, and that’s why they’ve paid the penalties and are accruing penalties. It does not stop. This is not a transaction for which they said ‘Kingman supports the PLP, give him a transaction’.

“You would think that the strongest contract you could have in any country is with the country.... There’s nothing wrong with not honouring a contract, but you pay. If you decide you don’t want a contract, pay it out. That’s business. You do it every day. There’s no love lost. It’s as simple as that. They [the Government] just don’t want to move. You have to take responsibility. You’re the Government. Government is continuous.”

Recalling how several Cabinet ministers ducked him when he visited the House of Assembly on November 23 to confront them over his plight, Mr Ingraham added: “I said to myself: There’s no reason for me to go through this. I’m in the House of Assembly looking like I’m begging for something. That is a demeaning feeling. A professional should not be made to feel like that in our country.

“We live in The Bahamas, where the more things change the more they stay the same. It’s almost as if only certain people are supposed to be in these transactions. You work hard as a young black professional, put together a transaction at great personal risk.. It’s almost as if you’re allowed to participate in transactions only to a certain level. There’s something wrong with that.

“The small mindedness of the leaders trickles down to the people. We’ve got to get beyond that.”

Mr Ingraham’s situation was one of two cases cited by Mr Turnquest during the 2018 mid-year Budget, where he revealed that the Government owed between $13-$14m for property leases and had “no exit clauses”, even though “not one single government worker has ever set foot in the building”.

He suggested some matters may result in legal action as the Government seeks to escape commitments it has no use for, adding: “Some of the agreements we have met in place, we are seemingly hand-cuffed even though we have no need of the service, so we have to figure out how to equitably exit these arrangements the former government put us in.

“We owe $13 million in one case, $14 million in another. But not one government worker ever set foot in the building. There’s no exit clauses; the leases cannot be terminated. We have to pay it to the end. We’re stuck.”

“You wouldn’t do it with your own money,” the deputy prime minister said of these and other contracts entered into by the former government. “No one would do it with their own money. It is evident that with these ongoing commitments we need to be doubly vigilant over the balance of the fiscal year to bring spending below Budget limits.”