By NEIL HARTNELL
Tribune Business Editor
FORENSIC investigators have urged Sky Bahamas’ main financier to subpoena its accounts via the Supreme Court so the fate of more than $28m advanced to the failed airline can be determined.
The BDO accounting firm’s report - which Fred Kaiser’s companies are heavily reliant upon to support the allegations made against his former business partners, ex-deputy prime minister K Peter Turnquest and former Sky chief executive, Captain Randy Butler - says there is presently insufficient evidence to conclude that a fraud has been perpetrated.
Asserting that such claims can only be proven if access is gained to Sky Bahamas’ accounts, BDO’s forensic report said for them it raised questions about the accounting, record-keeping and support documentation for loans advanced to Sky Bahamas by Mr Kaiser’s two companies, Alpha Aviation and Advanced Aviation.
Mr Turnquest, who is not named as a defendant in Mr Kaiser’s action despite purportedly playing a central role in an alleged “bogus loans conspiracy”, managed both these entities on Mr Kaiser’s behalf while also being Sky Bahamas’ 70 percent majority shareholder and chairman. He has vigorously denied any wrongdoing and pledged to fight the claims made against him.
BDO’s report questioned the processes followed in making payments in compliance with First Caribbean International Bank (Bahamas) banking mandate that stipulated who the account signatories were and set limits on how much they could authorise for payment in any transaction.
The report, which has been seen by Tribune Business, emerged as both Mr Turnquest and the Prime Minister last night confirmed he had stepped down as deputy prime minister and minister of finance to ensure the allegations against him do not become “a distraction” for the Government as it grapples with the worst fiscal and economic crisis in Bahamian history. Branding the allegations “unfounded and untrue”, Mr Turnquest said: “To protect my family, and in the best interest of my constituency and my party, I have offered my resignation as deputy prime minister and minister of finance to the Prime Minister with immediate effect.
“When I met with the Prime Minister today, I informed him that while I am confident my reputation of transparency and accountability will be vindicated once the allegations against me have been fully ventilated through the courts, I did not want a private business dispute, which occurred prior to my taking public office, to become a distraction to the Government, or to the important national work that lies ahead.
“Our nation is undergoing an unprecedented time in its history. We are fighting a global pandemic, resulting in unprecedented economic challenges and a difficult road ahead to maintain stability and recovery. We must all continue to commit to doing our part.”
Mr Turnquest added that he had acted with “total fidelity” while holding ministerial office, and said: “I look forward to putting this matter behind me and continuing to encourage modernisation and reform in our country, to which I remain so grateful for allowing me to serve. “At an appropriate time, I will have more formal comments to make in regards to the circumstances of the allegations made against me and the actors that have perpetuated it.”
There was much speculation yesterday that Dr Hubert Minnis would appoint former Central Bank governor, Wendy Craigg, who is currently a senior adviser at the Ministry of Finance, as minister of state for finance while he retains the “minister of finance” portfolio.
Such a move would require that Mrs Craigg be named to the Senate, necessitating a change in the Government’s line-up there. Several sources said the only likely alternative to this was to shift Dionisio D’Aguilar, minister of tourism and aviation, who has an accounting and business background, to the Ministry of Finance.
BDO, meanwhile, said it needed “access to Sky Bahamas’ financial records” to determine whether the advances from Mr Kaiser’s two companies were used for the intended purpose. “The loan payable to Alpha Aviation from Sky Bahamas was in the amount of $22.556m as at December 31, 2018. The loan payable to Advanced Aviation from Sky Bahamas was in the amount of $5.917m as at December 31, 2018,” the BDO report states.
“As a result of the aforementioned loans, we suggest that Mr Kaiser petition the court to have Sky Bahamas’ books and records subpoenaed and turned over for forensic review. This forensic review will identify the use of funds transferred to Sky Bahamas from the companies.”
The forensic accountants said they were unable to reconcile Sky Bahamas loan liabilities to Alpha Aviation and Advanced Aviation from the records they studied.
BDO said it also required the financial records for AOG Maintenance, the company that owned Sky Bahamas’ hangar at Lynden Pindling International Airport, be subpoenaed as loans and advances were also made from Mr Kaiser’s firms to this entity.
And it added that it needed to take a closer examination of Aviation Oversight Group (AOG), one of the defendants named in the “statement of claim” by Mr Kaiser and his firm. “Aviation Oversight’s purpose needs to be examined in more detail,” BDO said.
Captain Butler, when contacted by Tribune Business last night, voiced surprise at BDO’s suggestion Mr Kaiser subpoena Sky Bahamas’ financial records on the basis that the Canadian businessman already possessed them.
The former Sky Bahamas chief said Mr Kaiser and his agents “took everything with them, record and computers”, and had them for seven to eight months after he took over AOG Maintenance and subsequently tried to block the airline from accessing its airport hangar.
Captain Butler also alleged that Advanced Aviation, which owned Sky Bahamas’ planes and engines, leasing them to the airline, effectively made the aircraft “stateless” and failed to inform the Bahamas Civil Aviation Authority when it redomiciled to the Cayman Islands.