• Treasures Bahamas fights claims ‘not a cent paid’
• US supplier facing Chapter 11 bankruptcy fight
• Franchisor principal’s u-turn over $1.3m in sales
By NEIL HARTNELL
Tribune Business Editor
A local luxury goods retailer is locked in a furious $34m legal battle with an overseas supplier who is asserting that the dispute threatens “to ruin the name of The Bahamas” if not resolved.
Satish Daryanani, principal of Miami-based Sovereign Jewelry, is alleging in court documents obtained by Tribune Business that the Treasures Bahamas group and its franchisor have failed to pay him a single cent of what they owe on high-end jewellery products and loans since the COVID-19 pandemic began last March.
He is claiming that the local franchise, headed by Leon Griffin, former Bahamas Taxi Cab Union president and husband of ex-Cabinet minister, Melanie Griffin, together with the Treasures International LLC franchisor, have breached an October 2, 2019, agreement governing their three-way relationship and the supply of luxury goods on consignment by Mr Daryanani to the Bahamian retailer.
That agreement, which was reached following an earlier dispute that erupted between Mr Daryanani and two of Treasures International’s principals over “the accounting” and “sale and payment of the products”, stated that the Sovereign Jewelry chief was to become a director of all the Treasures Bahamas companies that owned the group’s eight stores.
He was also given “the right to, and is encouraged, to appoint agents and representatives of his own choosing to carry out inventory checks of the stores... to his satisfaction and communicate any discrepancies”.
Consignment goods are products supplied to a third-party that is authorised to sell them. The ownership and title in such goods, though, vests in a consignor or supplier such as Mr Daryanani until such time as they are sold by the third-party retailer, in this case Treasures Bahamas, whereupon the two parties divide the proceeds between each other.
Mr Daryanani is alleging that he was “at all material times the owner of the property in the goods and chattels” supplied to Treasures Bahamas and its franchisor, and they were effectively his “sales agents” who owed him “a fiduciary duty of the utmost good faith”.
However, he is claiming that Mr Griffin’s retail group breached the October 2, 2019, agreement by failing to appoint him as a director of the various companies, give him access to its bank accounts and stores, and failing to repay due debts.
The Sovereign Jewelry chief is also claiming that the Treasures International franchisor, together with its two principals, Jitendra Keswani and Raj Chandiramani, also failed to repay a $7.5m loan based on the “goodwill” built up in the two Treasures Bahamas’ luxury goods stores they operated on Mr Griffin’s behalf - the Parklane Lux on Bay Street and the Parklane Marina in the Atlantis Marina.
As a result, Mr Daryanani has been seeking a Supreme Court order/injunction that would prevent Treasures Bahamas and its franchisor from selling any “unsold goods” he has supplied as well as requiring the Bahamian retailer and its franchisor to return all product that was unsold as at January 15, 2021, last year.
Justice Loren Klein, though, has yet to rule on his application. And Mr Daryanani told Tribune Business that the pressure from his own suppliers, who are demanding that he either return their goods or pay them for what Treasures Bahamas has sold, means he is just days away from filing for Chapter 11 bankruptcy protection in the US.
“I’m at the breaking point of going belly up. I’m at the last straw. It’s forcing me to maybe file for Chapter 11 bankruptcy protection,” he said. “I’ve not been paid $1 since March last year. They’ve refused to return the goods to suppliers, gave me no access to the stores, and I’ve not been paid or had access to the goods to take an inventory count.
“Consignment’s whole purpose means just that: Consignment. You don’t own it. They’re not even allowing suppliers to come and take inventory. You’re not allowed to come and take inventory, and you’re not getting paid.”
Court documents seen by Tribune Business allege that, despite the devastating COVID-19 fall-out, Treasures Bahamas’ remaining four open stores - including the two Parklux outlets, Cotton House and Pink Flamingo - sold $1.3m worth of luxury goods between July 2020 and April 2021.
Mr Daryanani is alleging that this sum will have increased significantly since as tourism and the wider Bahamian economy continue to re-open, yet he is claiming that none of this has been paid to him, and that it has all been retained by Treasures Bahamas.
Suggesting that the dispute could have wider ramifications for the entire Bahamian luxury goods market, especially at a time when it is gearing up for the cruise industry’s rebound and that of stopover tourism, the Sovereign Jewelry chief said his experiences would deter other suppliers from providing consignment goods to any merchant in this country.
Pointing out that the supplier market was very close-knit, Mr Daryanani said: “Nobody will want to supply any goods to anybody on consignment. This will ruin the name of The Bahamas with jewellery people worldwide. It’s toxic. You don’t know who you’re dealing with. Is it the franchisor or the local partner who decides, out of the blue, not to return the goods?
“Suppliers will now only supply on a cash on delivery basis. It’s going to affect the other businesses in The Bahamas. This is why no new inventory is coming to The Bahamas, leaving stores that are empty. It’s huge.”
If what Mr Daryanani says is true, Bahamian luxury goods retailers will feel the impact on their cash flows as well as the availability of high-end product of the consequences of his dispute do take on wider ramifications. He himself is seeking multi-million dollar damages from all parties concerned.
Mr Griffin, when contacted by Tribune Business yesterday, initially appeared to deny knowledge of any legal dispute involving Treasures Bahamas. “I am not having any dispute at all,” he said.
When it was pointed out that Supreme Court-filed documents in this newspaper’s possession said otherwise, Mr Griffin declined to comment further on the basis that the dispute is before the courts. “I’m the kind of guy who believes the matter should be dealt with by the courts,” he added. “Let the courts handle the matter. We’ll sit tight and let the courts handle it.”
Alfred Sears QC, former attorney general who is representing Mr Griffin and the Treasures Bahamas companies in the dispute with Mr Daryanani, also declined to comment when contacted by this newspaper.
It is understood that Treasures Bahamas has yet to file a formal defence to Mr Daryanani’s action, although Mr Sears made submissions to the Supreme Court on its behalf in contesting Mr Daryanani’s claims.
Treasures International, and Messrs Keswani and Chandiramani, rejected the Sovereign Jewelry chief’s claims that they breached and violated the October 2, 2019, agreement. They asserted in an October 7, 2020, defence that they “acted in full compliance” and “honoured their commitments”, asserting that any breaches were caused by Mr Daryanani as he “sought to interfere” in their commercial operations.
The duo alleged that a total $2.712m was paid to Mr Daryanani and his company between October 19, 2019, and March 12, 2020, under the terms of the agreement, and claimed that they had “a possessory right to the goods” supplied until they were sold.
Messrs Keswani and Chandiramani also alleged that Mr Daryanani had sought to terminate their agreement by supplying a competitor, Solitaire Outlet, and counter-claimed for a total $1.5m representing a mixture of insurance premiums; storage fees; labour costs and projected profits.
However, just seven month later, Mr Keswani broke ranks and performed a complete u-turn via a May 4, 2021, affidavit in which he asserted that Mr Daryanani’s claims were true. “I confirm and admit that [Treasures International] and I are liable and indebted to the plaintiff in the sum of $33.982m,” he alleged.
“I also confirm that the first defendants [Mr Griffin and Treasures Bahamas] and each of them are similarly liable and indebted in the sum of $33.982m.” Mr Keswani admitted that both franchisor and franchisee had “failed to accurately give an account to the plaintiff” of the monies earned from selling his goods, and that Mr Daryanani was “paid less than he was entitled to be paid”.
Confirming that Mr Daryanani had not been paid a single cent since March 2020, Mr Keswani alleged that the jewellery provided by the former had been moved from the now closed Diamond Centre outlet. HYE also claimed that a VAT refund received by Treasures Bahamas had not been paid to Mr Daryanani as it should.
Messrs Keswani and Chandiramani previously came to Tribune Business’ attention in 2017 when Bahamas Customs caught the former trying to smuggle jewellery and other luxury goods into the country. He subsequently offered to pay offered to pay the Ministry of Finance almost $400,000 in customs duties and fines after the merchandise was seized, indicating a multi-million dollar sum was involved.
In 2016, applications to the Immigration Department for a two-year renewal for work permits for the duo were refused and the pair given three weeks to wind up their affairs and leave The Bahamas. However, work permits were eventually granted despite the Customs case in a situation that suggested high-level political interference at the Immigration Department under the former Christie administration.
Mr Keswani’s affidavit alleges that same year, 2016, he made “a decision to stop working with and doing business” with his original Bahamian partner, John Cates at the Island T-Shirt Company. Tribune Business, though, understands that Mr Cates decided to stop doing business with him after the Customs smuggling incident broke.
Under the National Investment Policy, retail is supposedly reserved for Bahamian ownership only. Needing another Bahamian partner, Mr Keswani said he “then persuaded Leon Griffin to be substituted for Mr Cates” as the shareholder of the Treasures Bahamas group, and the latter entered a franchise agreement with Treasures International on December 6, 2016.