Antigua Government moves to buy back airport lands

By OBSERVER News

Prime Minister Baldwin Spencer has revealed that the government is trying to buy back two parcels of land at the VC Bird International Airport from a development company owned by jailed Texan financier, R Allen Stanford.

In his New Year’s address, the nation’s leader said the land is needed for the construction of the new airport terminal, which had its groundbreaking ceremony back in early November last year.

Spencer said the government aims to have construction for the two-year project begin this month. However, he said the project “necessitates the utilisation of two parcels of land currently owned by Stanford Development Company Limited: the small parcel (.64 of an acre) to the east which was used by the taxis as a parking area, and the former government car park parcel of 5.42 acres,” Spencer said.

Stanford had in February 2003 purchased from the government 25.59 acres around the airport compound, including these parcels at a concessionary price of EC $1.10 per square foot, according to Spencer.

The prime minister said he hopes to have an agreement reached that would allow the government to take control of the land immediately.

“I have instructed the Airport Authority to hold discussions with the company officials early next week towards arriving at a reasonable sale price of the two parcels of land back to government and on terms that will allow for immediate occupation,” Spencer said.

There is no indication on whether the company plans to comply with the request but Spencer said he is anticipating full co-operation and a quick resolution.

“Given the national interest at stake and the imminent commencement of construction works, I expect that the necessary co-operation and good faith on both sides will allow a settlement of this matter in the shortest possible time,” Spencer said.

Cabinet Backs New Guiana Island Project

The Cabinet of Antigua & Barbuda has endorsed a development proposal for Guiana Island and Crump Peninsular, in spite of its earlier position to declare the lands part of a protective management plan for a marine sanctuary.

The land, situated in St Peter’s parish and owned by R Allen Stanford’s Stanford International Bank (SIB) – have been a contentious topic stretching between past and present administrations and stirring environmental activists.

It is now in the hands of joint liquidators as Stanford awaits his trial in the United States following an investigation for fraud by the US Securities Exchange Commission.

These lands were, however, never among those parcels compulsory acquired by the government and now handed over. Attorney General Justin Simon announced in Parliament on May 27 that some of the lands were released to Vantis Business Recovery Services to generate money to repay investors who were allegedly defrauded.

According to information on www.iprantigua.com, Gilbert Boustany, acting on behalf of liquidator Nigel Hamilton-Smith, is seeking interested investors for acquisition of the land and the Island Paradise Resort Development project.

So far, the joint liquidators Hamilton-Smith and Peter Wastell of Vantis Business Recovery Services have “engaged OBMI and Ernst & Young to create a master plan vision and a high level feasibility study for the future development of the site.”

In a letter dated February 20, 2010 to Boustany, the government gave its seal of approval to the Island Paradise Resort (IPR) proposal.

“This is to advise that the Government of Antigua and Barbuda is in strong support of the Island Paradise Resort Development Project and the Crump Peninsular and Guiana Island,” the letter said. “At a meeting of the Cabinet on Thursday 18th, February the project was presented by Antigua and Barbuda Investment Authority and received favourable consideration from the Cabinet. I look forward to continuing working closely with your group to see the full completion of this project." It was signed by Minister of Tourism, Civil Aviation and Culture John Maginley.

The AG confirmed to Caribarena.com that Cabinet met to discuss the proposal and later submitted an agreement in principle.

“The creators were seeking to attract investors and basically indicating to investors the kind of development, and they wanted the government’s OK in principle to that kind of development on Guiana Island… there is an agreement in principle with the development proposals,” he said. “There has been no firm proposal in respect of the development. What they wanted was to advertise the place and to see what kind of development would be supported when they present it to would-be investors."

The IPR website said the company intends to create a project that will rank first among destinations in Antigua, and significantly boost tourism. It also promises to preserve the existing natural resources on the site.

Caribarena.com has been informed that the proposal has reached the Development Control Authority (DCA) for consideration. We were further told that DCA had forwarded the document to the Environmental Division for review, and to submit recommendations. However, this has not been confirmed by those bodies.

Simon, however, told Caribarena.com that for a plan to reach DCA, it must be presented by the person or persons who would be leading the actual development.

The overall project, as stated on the IPR website, includes five hotels with 1,060 rooms, in addition to 1,300 residential units, a golf course, a casino and sports marine, and commercial facilities on the 982 acres of Crump Peninsula, 478 acres of Guiana Island, and 52 acres on Crump Island.

In 2007, the United Progressive Party (UPP) administration refused to sell Guiana Island Farms land to Stanford for the construction of a multi-million dollar development.

Nonetheless, Stanford managed to bypass the government, and acquired the land from Asian Village Antigua Limited, owned by Dato Tan Kay Hock.

Dato Tan had failed to deliver on an agreement with the Antigua Labour Party (ALP) government to construct a resort on the property.

Update: Since writing this article, caribarena.com has confirmed that the joint liquidators Nigel Hamilton-Smith and Peter Wastell of Vantis Business Recovery Services are no longer the liquidators. It is also unknown who will assume the liquidation duties.

Lands Returned to Stanford

While taken on face value the following statement appears to be good news for Stanford victims, however it required international action to force the government to acquiesce and hand back these properties.

It should also be remembered that properties within the airport complex have been retained by the government and that similar promises were made to Half Moon Bay holdings which still have not been honoured.
Attorney General Justin Simon announced in Parliament yesterday that all “Stanford” lands with the exception of those inside the airport compound have been released from government hands.

Simon said the release comes in conjunction with a co-operation agreement signed between US receivers, Ralph Janvey and the joint liquidators.

“Earlier this week, I received communication from the joint liquidators of the Stanford Bank Limited … (That) a co-operation agreement between themselves and the US receiver has been filed.

“This co-operation agreement … seeks to bring an end to the various legal challenges that have been taking place between the joint liquidators and the US receivers,” Simon said.

The AG said a consent form was signed releasing the lands in response to legal challenges from parties seeking to claim funds they invested in Stanford International Bank Limited (SIBL). He listed the lands that have been released effective May 20 this year.

“The government has released from its acquisition process the three parcels of land, two of them vacant and the Bank of Antigua headquarters at the airport … and also the Pelican Island property … Government has also released from its acquisition process the three parcels of land in St John’s, the two vacant on High Street and the third housing the bank branch of the Bank of Antigua,” Simon added.

The attorney general explained that the plan, as it regards Bank of Antigua, is for an amalgamation of various indigenous banks within the OECS to take charge of the bank.

“Certain of the assets and liabilities of the Bank of Antigua will be sold to a new corporate entity, ECA the Eastern Caribbean Amalgamated Bank, which is made up of the various indigenous banks within the OECS who will then be taking over the Bank of Antigua,” Simon said.

The refusal of the government to release the lands within the airport compound means that the compulsory acquisition process will continue and Simon assured that compensation will be settled for those eight parcels of land.

“The issue for the compensation for these parcels in accordance with the principles laid down in the Land Acquisition Act has to be settled and the parties are to exercise best endeavours to complete agreement within six months of the order,” he said.

In February last year, the government acquired 254 acres of land previously owned by Allen Stanford, after he was accused of US $8 billion fraud.

Then Minister of Finance and the Economy Dr Errol Cort said that they were forced to take action because the Texan appointed receiver for Stanford International Bank, Stanford Group Company, Stanford Capital Management, as well as the investor and other individuals had sought to impose himself in as the receiver-manager of SIB.

Sun Printing and Publishing folds

The last vestige of what was once the R Allen Stanford empire crumbled Friday afternoon, with the closure of Sun Printing and Publishing Company Limited for an indeterminable period.

The 46 members of the Antigua staff and four in St Kitts received letters that read, in part, “owing to circumstances beyond our control, the company will be unable to sustain operations in the immediate future.”

Interestingly, a check on the St Kitts office, by an OBSERVER reporter, just after 3:30 pm yesterday as the staff in Antigua was receiving the news, revealed that up to that point, they were unaware of the development.

The letter noted that the directors, Stanford’s fiancée Andrea Stoelker and Barbara Streete, are working with legal counsel “to explore possible options for a solution to our short and long term difficulties.”

It was just last month that the paper was not printed for a week because of financial constraints that rendered management unable to clear a shipment of paper from the port.
Additionally, Antigua-based staffers said they walked away from the posh offices at the gateway to VC Bird International Airport being owned salaries for the last two pay periods.

The letter, which was signed by General Manager Patrick Henry, noted that there should be news on the way forward in the middle of next week. Incidentally, Stoelker was not at yesterday’s meeting and the news was delivered by Henry, who employees said spoke with his head hung. Only about half of the staff was present.

Sources said the directors are in discussions with the principals of the Barbados Advocate, who expressed an interest in the company.

Informed that rather than a sale, a lease option is being discussed, members of staff crafted a proposal, to which they had no reply at the time of going to press, to ask Stoelker and Streete to consider using 25 per cent of the severance owed to a group of them to lease the operations.

Sun employees had received severance letters at the end of July 2009, although they did not receive the monies to which they were entitled at the time. Those sums are, however, accruing interest until such a time that they can be paid.

There was mixed emotions from employees with whom this newspaper spoke yesterday afternoon. Some said they saw this coming and had prepared as best they could. Others said they were hopeful that issues would be resolved and they would be back at work with the company in some form or other, and a few were clearly dejected at the prospects of having commitments and being unemployed.

Of further concern to another set was issues not addressed yesterday, such as late notice of the lay off, outstanding salaries and vacation pay.

The Sun, which began operations in 1998, in the past 12 months doggedly withstood the loss of its benefactor, who is in a Texas jail waiting to defend himself against charges that he orchestrated a massive ponzi scheme.

With diminished capacity, statute and skeleton staff, Stanford Development Company (SDC) struggles on.

Several other Stanford companies, namely The Pavilion, Stanford Trust, Antigua Athletic Club, Sticky Wicket Restaurant, Stanford Cricket Ground, SDC Warehouse at Powells Estate and the Parking Lot were forced out of operation earlier this year for outstanding utilities owed to Antigua Public Utilities Authority (APUA).

STANFORD FINANCIAL GROUP VICTIMS FILE CLASS ACTION SUIT AGAINST ECCB

February 16, 2010 (Dallas) ‐ On the one‐year anniversary of the commencement of the United States Securities and Exchange Commission’s enforcement action against Allen Stanford and the top management of his global empire of financial companies, the victims of the $7.2 billion Ponzi scheme filed a class‐action lawsuit against the Eastern Caribbean Central Bank (ECCB), five Caribbean financial institutions, and the
government of Antigua and Barbuda. The lawsuit, filed by Morgenstern & Blue, LLC, seeks compensation for ECCB’s unlawful seizure last year of the Bank of Antigua, a crown jewel in Allen Stanford’s fallen financial empire.

“Instead of acting as a legitimate central bank, the ECCB became a partner in crime with the Government of Antigua and Barbuda when it seized the Bank of Antigua, a viable and valuable financial institution,” said attorney Peter D. Morgenstern. “The Bank of Antigua was, and remains, enormously valuable. All of that value rightfully belongs to Mr. Stanford’s victims.”

According to the lawsuit, which was filed in the United States District Court in Dallas, Texas, at the time of ECCB’s seizure of the Bank of Antigua, the bank had considerable value, including undisputed loan receivables from the government of Antigua and Barbuda worth at least tens of millions of dollars and possibly more. The complaint alleges the victims are entitled to compensation for the value of the Bank of Antigua when it was seized, determined by an independent auditing firm, as required under the ECCB’s governing treaty. Instead, equity ownership of the bank was distributed by the ECCB to Antigua itself and five bank defendants for little or no compensation. The financial institutions that took ownership of the Bank of Antigua are Antigua Commercial Bank, St. Kitts‐Nevis‐Anguilla National Bank Ltd., Eastern Caribbean Financial Holdings Company Ltd., National Commercial Bank (SVG) Ltd., and National Bank of Dominica Ltd.

“This action seeks redress for a second brazen act of thievery from Stanford investors, perpetrated in part even after the disclosure of the Stanford fraud in February 2009, and the appointment of receivers to marshal and distribute Stanford’s assets, in the United States and Antigua. This theft was perpetrated not
only by Stanford, but also by the Bank of Antigua’s putative regulator, ECCB, the government of Antigua, and by all too willing co‐conspirators at Caribbean‐based financial institutions which, unless this Court acts, will have obtained a multi‐million dollar windfall at the expense of Stanford’s many victims,” said Morgenstern.

ANTI-CRIME, ANTI-ANTIGUA
In an effort to build awareness about the corruption deeply rooted in the Antiguan government that led to actions like the expropriation of 49 Stanford‐owned properties, including the Bank of Antigua, that belong to investors, the Stanford Victims Coalition (SVC), an international advocacy group for victims of the Stanford fraud, announced the launch of an international campaign to boycott Antigua and Barbuda.

The SVC campaign titled “Anti‐Crime, Anti‐Antigua,” calls on travel professionals, prospective tourists, and investors from around the world to send a clear message to the government of Antigua and Barbuda by boycotting Antiguan hotels and resorts, cruises to Antigua, investments in Antiguan financial institutions or in companies or ventures based in Antigua. The SVC, through its thousands of members, plans to increase its lobbying efforts with the United States government to build awareness of Antigua’s actions against U.S. citizens as well as citizens from over 130 countries. The comprehensive “Anti‐ Antigua” campaign includes plans to contact travel agents, trade publications, and attend travel trade shows, and will seek out professionals in the travel industry to partner with to garner support and promote justice for victims of corrupt governments like Antigua, which relies heavily on tourism and investments from the United States, Great Britain, and other home countries of Stanford victims, yet portrays itself as a friendly vacation paradise. The SVC’s “Anti‐Antigua” effort will work to create awareness that Antigua was Stanford’s co‐conspirator in crime, and has enriched itself at the expense of thousands of innocent people whose life savings were lost in the unprecedented Stanford fraud.

“Antigua was the recipient of hundreds of millions of dollars of Stanford investors’ money, through loans, bribes and flamboyant philanthropic gestures made by Allen Stanford with money stolen from investors,” said Angela Shaw, SVC founder and executive director. “Instead of acting with integrity and working toward efforts to help compensate the victims of this fraud, their government not only enabled, but profited from, Antigua continues to refuse to answer for its complicity in Stanford’s crimes, pay back the illegal loans it received, or return valuable real estate assets that it expropriated last year.”

“Developers, travel agents and tourists are urged to recommend and choose vacation destinations and investments in countries that respect the rights of foreign citizens and respect the rule of law,” Shaw said. “The SVC’s message to those groups is that Antigua has a long history of corruption and it has stolen property from 28,000 investors from around the world. Of all the vacation destinations in the world, Antigua should be at the very bottom of the list of places to visit.”

EFFORTS TO STOP FOREIGN AID TO ANTIGUA
In a blatant act of disrespect toward Stanford’s many victims around the world – especially the citizens of Venezuela, the country with the largest number of victims of the Stanford fraud – Antigua recently partnered with President Hugo Chavez of Venezuela, who provided Antigua with $50 million of financing. Antigua also continues to actively seek financial assistance from the international community through requests for IMF and World Bank loans, as well as direct aid from governments in countries that are home to Stanford’s victims.

The SVC recently lobbied the U.S. government to help block aid to Antigua, an effort that resulted in the introduction of a United States Senate Resolution in December 2009, which was led by Senator Richard Shelby (R‐Alabama), ranking Republican member of the Senate Banking Committee, and cosponsored by eight senators. In remarks introducing the Resolution, Senate Foreign Relations Committee Member Johnny Isakson (R‐Georgia), said, “Allen Stanford bilked billions of dollars from innocent Americans through his Ponzi scheme, and the laws of Antigua shielded the Stanford Financial Group while it operated.”

“It is absurd that the Government of Antigua and Barbuda is standing in the way of helping victims,” said
Senator Shelby. “The United States will not accept such behavior.”

SIBL Investors Might Not See Money Any Time Soon

Former Stanford International Bank Limited (SIBL) investors might have to wait in a long line of people who will have first bite of the proceeds of the assets recovery process now underway.

This was the sentiment expressed by Attorney General Justin Simon in an interview with Fox Business, casting doubts that the investors will be repaid when assets are sold in Antigua & Barbuda.

Simon said US receiver of the SIBL Ralph Janvey was only concerned about the assets of the international bank.

“That entity is only the owner of three parcels of land. Most of the lands there are in the name of Stanford Development Company and various other entities which he formed here. In fact, on record here, he has about 23 local companies, not all of them are commercial enterprises,” the attorney general said.

“…A lot of them are simply holding land, but let me make it very abundantly clear that we do not seize lands. The constitution of Antigua & Barbuda provides that the government can compulsory acquire. It also makes provision that compensation must be paid to the former owners of the land and we intend on dealing with it on that basis.”

Despite the billions of dollars that have passed through Stanford’s hands, there are predictions that only a small fraction of that money will ever be recovered.

Whatever the amount, Simon says there will be very large claims coming in from a wide range of people, including the obvious receiver’s fee.

“Mr Stanford has left a substantial amount of debt in Antigua,” Simon said. “There are trade creditors, monies owed to our utility company, APUA in respect of electricity, telephone and that sort of thing.

“There are also the 450 employees who have been severed but severance has not yet been paid to them.”

He also said that the government was very conscious of the financial obligations left behind and it would make every effort to ensure that those various claims are satisfied in addition to the claims of various investors and depositors.

Simon said that according to law, severance payments are first and then government utilities. Creditors and former customers would then be paid in priority decided by the receivers who are recovering money and selling assets.

The value of the land being sold is also in dispute.

US investigators claimed Stanford and his accountants routinely inflated the book value to conceal the true worth of his enterprises.

After Stanford’s arrest in June this year, for his alleged involvement in a US$8 billion Ponzi scheme, investors have been claiming up to US$24 billion in damages from Antigua & Barbuda, but they are still awaiting permission from the court in the US to proceed with the suit.

Former head of the Financial Service Regulatory Commission Leroy King, who is implicated in the scheme, is currently awaiting extradition to the US to face charges.

King is accused of conducting fraudulent audits and examinations of the bank’s books in exchange for financial bribes and gifts.

He was granted bail in the amount of $500,000, with a $100,000 bond to facilitate his release. In addition to surrendering his travel documents to the court and two sureties, he has been placed on house arrest and must be accompanied by one of his sureties once he leaves his home.