By Ria Taitt Newsday
MTS board members were given Christmas hampers in December, 1999, resulting in expenditure of some $50,453 in brandy, champagne, wines, vodka, rum, confectioneries, turkey and ham.
This is revealed in the latest Auditor General Report on the company, dated March 20.
The Report also noted that the state enterprise spent large amounts on entertainment. The total expenditure for entertainment allowance and staff welfare was $358,750.89 in 1999. "Several bills submitted indicated purchase of only alcoholic beverages," the document noted.
The Report singled out some $189,729.14 "mainly on food and drink", which was paid to Valpark Chinese Restaurant and the Parrot Steakhouse and Cocktail Lounge. Noting that this money was taken out of the company's Welfare Account, the Report stated that this account was not used for its intended purpose because "very small payments relate to the expenditure for staff welfare".
It added that a sample of bills for one month— September— showed that between September 2, 1999 and September 30, 1999 entertainment claims were submitted for 14 days, two of those days for which claims were made, the 4th and the 5th, were Saturday and Sunday.
The Report noted that air travel amounting to $11,025 was provided for Ria Soodeen, who was not an MTS employee, to go to India, a payment which was approved by the CEO, Terrance Kalloo. Also payments of $17,987 and $14,049 were made to Kalloo and L. Rattansingh to travel to Las Vegas on a business trip. "The nature of the business was not indicated on the payment vouchers nor were supporting bills produced. There was no Board approval for this trip nor was there any report by the CEO to the Board on his Report," the Report said.
The Report pointed to a discrepancy with respect to the payment of an advertisement in Fortune Magazine. A copy of the contract document indicated an initial payment of US $850,00 and another payment of $850,00 (which ought to have amounted to a total of US $1,700) However the total amount (paid) was stated as US $23,700 (or TT $147,309). Noting that the description and the method of preparation of the contract seemed to be inconsistent with the image of Fortune 500, the Report said that the copy of the contract for this expenditure was signed by the Chairman, Mr Charbonne. "The original contract was not provided for audit inspection," it noted.
The Report stated that there was no approval from the Corporation Sole or the Line Minister for the payment of any of bonuses paid by the company. These included bonus payments for the Executives. They were Kalloo who received $140,000; Ramdeo Maraj, Divisional Manager- Engineering $51,750; Sandra Chapman, Divisional Manager-Marketing and Malcolm Alexander, Divisional Manager-Maintenance each got $2,906.25. The Report stated that these bonuses were taxed at 28 percent instead of the higher rate of 35 percent.
The Report noted that all the major contracts awarded on the Whitehall project were done without following the Tendering procedures. It stated that in several instances the purchase orders were issued after the contractors had provided services.
The Report stated that Board approval was not produced for any of the Loan Agreements entered into during the 1999 period. These were as follows: Republic Bank- $611,269.50; Republic Bank- 931,500; General Finance Corporation- $170,016.17; Scotiabank - $150,000; Scotiabank- $138,000; First Citizens Bank - $6 million.
The report noted that Section 87 (b) of the Articles of Association indicates that loans in excess of $300,000 (10 per cent of issued share capital of $3 million) needed written concurrence of the majority shareholder, Corporation Sole.
The report stated that Kalloo advised the Bank that he was not personally aware that Scotiabank held a second mortgage on the property when he offered a second mortgage to First Citizen’s Bank Limited. The loan agreement with Scotiabank was dated June 1, 1999.
In addition, the December 1999 security in respect of several credit facilities with Scotiabank included this second demand mortgage over the MTS Plaza property. All correspondence in respect of these loans were addressed to the said Chief Executive Office, Mr Kalloo and he signed the respective agreements.
The report noted that the Chairman, Mr Charbonne by letter dated December 1999 informed Scotiabank Limited that a resolution was passed at a meeting of the Board of Directors held on 1999 to create and issue a chattel mortgage for $138,000 for Vehicle PBH 2299. Board minutes of the meeting were not produced. "The last meeting for 1999 was held on 1999 December 21. The next meeting was held on January 28,2000.”
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