UDC-Bashco deal to be rescinded, says Christie

The Urban Development Corporation (UDC) is set to rescind its decision to sell a state-owned property in downtown Kingston to Bashco Trading Company, having admitted to breaching the Government's divestment guidelines because it failed to advertise it.

Contractor General Greg Christie said Thursday that the UDC advised his office that it would request the termination of the sale agreement pending for 35 West Parade in order to comply with the divestment process. The UDC is the registered proprietor of the premises.

Bashco owner Gassan Azan, asked to comment on the UDC's decision, told the Financial Gleaner that he was unaware of the about-turn.

"I am very surprised about this," said Azan. "I am the party they have sold it to and I know nothing about this," he said.

Azan said the agreement with the UDC has already been executed and is not pending as the contractor general has suggested.

He emphasised that neither the UDC nor his lawyer has notified him of the intended withdrawal of the sale.

Azan later issued a statement asserting the integrity of the deal he struck with UDC, saying his company had "scrupulously followed the steps outlined by the authorities."

Azan also said he was consulting with his lawyers on legal measures available to him to protect his interest as an investor.

Neither UDC general manager Joy Douglas nor the firm's corporate relations division responded to Financial Gleaner queries yesterday.

Christie said the UDC's notification was made on Wednesday in response to a recommendation by his office made a week ago for the state developer to "immediately terminate the arrangement with Bashco Trading Company Limited, and advertise the property in keeping with the strictures and requirements of the Government of Jamaica privatisation policy and procedures".

In the interim, Christie had written to Prime Minister Bruce Golding advising that he had launched an investigation into the pending sale of the property to Azan on the grounds that the transaction raised questions regarding its propriety, given expressions of interest by the current occupier, Michael Mahfood of H. Mahfood & Sons Limited.

Christie said the property was sold to Bashco Trading for $31.4 million even though Mahfood, based on correspondence from his lawyers to the contractor general's office, was willing to pay substantially more to acquire it, largely to ensure continuation of his business at that location.

On October 10, Christie said, UDC general manager Joy Douglas wrote to the contractor general's office advising that a sale agreement was executed two months earlier on August 11.

Douglas also advised that the UDC received an unsolicited proposal from Bashco, through Azan, to purchase the property, Christie said in his letter to the Prime Minister. She also advised that Azan submitted a developmental plan which coincided with the UDC's plan for the redevelopment of downtown Kingston.

The UDC general manager admitted that it was a breach of the public-sector divestment procedure not to have publicly advertised the property, but said that although that could be explained on the basis of the corporation's historical operation, "we genuinely erred". This according to Christie's statement.

The contractor general's office commended the UDC, particularly board chairman, Wayne Chen, for what it said was the principled and contrite stand taken by the agency.

"The UDC has demonstrated that it is at least prepared to be held accountable for its admitted breaches of the rules and to implement the requisite corrective measures which will ensure probity in its handling of the matter in the interest of the country's taxpayers," said Christie.

He said the willingness of the UDC to heed the recommendation of the contractor general's office "comes in stark contrast to the conduct of the relevant public bodies which were involved in the recent Jamalco divestment, Sandals Whitehouse hotel divestment and LNG tender process matters. These public bodies and their governing officers had, at the outset, chosen to summarily ignore the considered recommendations of the OCG to regularise the contracting process and to place same under the supervision of the OCG."

Swift corrections urged

The contractor general said his office has consistently encouraged public bodies which have breached the contracting guidelines and laws to move quickly to correct the process rather than to persist in the breach.

"The precedent that the UDC has set in its efforts to remedy its transgressions, augurs well for the establishment of good governance best practices in public contracting in Jamaica," said Christie.

"It is something that should be emulated by all public bodies, for in the final analysis the work of the OCG should not be about forcing public bodies into compliance with the relevant laws, but rather at securing their voluntary compliance with the said laws in the interest of the people and taxpayers of Jamaica," he said.

mcpherse.thompson@gleanerjm.com