TTMF MANAGER SUES CALDER HARTBy Andre Bagoo Tuesday, March 9 2010
AMIDST growing concerns over his management of the billion-dollar special purpose enterprise Udecott, documents obtained by Newsday yesterday raised fresh questions over former Udecott executive chairman Calder Hart’s management of another state company, the Trinidad and Tobago Mortgage and Finance Company Limited (TTMF).
Court documents filed in the course of a lawsuit lodged by former TTMF finance manager Nandalal Balroop, who was fired in May 2004 by the TTMF after reportedly questioning Hart’s management, raises questions over Hart’s corporate practices as well as the relationship between Hart’s multiple portfolios prior to his resignation from five State boards, including the post of chairman of the TTMF, last Saturday.
In an action for wrongful dismissal and fraudulent misrepresentation, Balroop, a chartered accountant who served as finance manager at the TTMF for 15 years before he was fired by the Hart-chaired TTMF, reveals he raised objections to a series of million-dollar transactions at the special purpose company which was set up to provide mortgage financing to prospective home-owners.
Those transactions, detailed in a notice filed in the High Court since February 2007, include:
* the obtaining of funds from the Home Mortgage Bank (favoured by the TTMF board whose chairman, Hart, was also the chief executive officer of the HMB) at interest rates of eight percent when cheaper funds were accessible from the National Insurance Board at a rate of four percent;
* the use of a software system, called Foresight Software, at a cost of $2 million by the TTMF, when that system was later “found to be unsuitable and was aborted” by the TTMF after they ignored the objection;
* the decision of the board to ignore his recommendation regarding the placement of insurance cover for the TTMF’s billion-dollar mortgage portfolio which had been endorsed by the board’s own insurance consultant;
* the failure of Hart to have published a notice informing the public that Balroop, whom Hart had suspended but then cleared of wrongdoing after an investigation, had been absolved of wrong-doing following the investigation.
In an affidavit, quietly filed in February 2009 while the proceedings of the Uff Commission of Inquiry into Udecott were ongoing, Hart responded to Balroop’s allegations.
He responded to the issue of the HMB loan thus, “as to the alleged objection to the Home Mortgage Bank funds, the truth of the matter was that the National Insurance Board (NIB) was not prepared to give the Trinidad and Tobago Mortgage Finance Company Limited funding.”
“This I arranged myself with NIB even at the lowest cost of funding. The average rate was around six percent, never four percent,” he revealed.
In the public court documents, Balroop, an economics graduate from the University of the West Indies, member of the Institute of Chartered Accountants of Trinidad and Tobago and a Fellow of the Association of Certified Accountants of England and Wales, deposed a tale of constant tension with the Hart-chaired board.
“The claimant often found himself in conflict with management and the board on account of his recommendations and the positions he took,” the notice reads. “The management of the (TTMF) and the board came to regard the claimant as somewhat of a fly in the ointment and showed dislike, ill-will and hostility towards him and took steps to unlawfully dismiss him.”
According to Balroop, he was first suspended by the TTMF in January 2003. Subsequently, after he wrote Hart on the issue of his suspension, Hart wrote him by letter dated March 24, 2003 asking him to answer, “serious questions that are being raised about financial matters which occurred at the TTMF”. Balroop responded and then, by letter dated May 7, Hart wrote Balroop informing him that a full audit investigation was completed and “as a result of its findings you are hereby reinstated.”
However, he was fired in May 2004 while on vacation leave after being told he was redundant, with a company official saying, “your services are surplus to our requirements.” Yet, one year later, the TTMF advertised the post of finance manager in the press. Thus, Balroop, argues, he was a victim of misrepresentation and wrongful dismissal. He is seeking damages.
Hart, in his affidavit filed last year, claimed Balroop was first investigated due to his failure to check for supporting documents for expenditure incurred by the then TTMF chief executive officer. However, he said, “there was no proof that his dereliction of duty in relation to the improprieties of the chief executive officer had benefitted him.”
“As for Mr Balroop’s alleged objection to the use of the Foresight Software, this was a decision taken by the previous board,” Hart added. He pointed out that the new board came in 2002 and in 2004 a decision was taken to pursue action against the software suppliers.
“Similarly, as to the insurance cover for our mortgage portfolio, we went to the insurers directly,” he said. “We prepared a request for proposals for all the major insurance companies. The result was that we received lower rates and we were able thus to reduce insurance premiums to mortgagers.”
Hart resigned as chairman of TTMF and Udecott, NIB, National Insurance Property Development Corporation (NIPDEC) and HMB last Saturday, days after documents which appeared to link him to a Udecott contractor emerged.
While he may be called for cross-examination on the Balroop lawsuit in weeks to come, he left the country for Florida on Saturday, mere hours before his resignation was announced. There were reports yesterday that Hart, who has been much praised by the Prime Minister Patrick Manning administration and who was even appointed as the HMB chairman after allegations were first raised against him, could return to Trinidad this week.
