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‘Phantom’ companies rake in $8.4m

By Peter Balroop
Sunday 3rd June, 2007

The Gafoor Public Health Commission of Enquiry Report has identified nine “phantom” companies that shared in $164 million in health sector contracts between 2002 -2005.

They are:

* American Medical Engineering;

* Desco Dental Equipment;

* DRC International;

* Hermes Ltd-H 9031;

* MD International;


* MDS Nordion;

* Scientific Suppliers and Technologies;

* Calmaquip.

In all, over the period, the nine firms—earned a—total of $8,414,753.33 with the lion’s share—$5.7 million—from the Ministry of Health.

In naming the nine ghost companies, the commission said it was a “grave” matter that demanded further investigation and appropriate action.

In volume two of the bulky report, in the chapter dealing with procurement and inventory management, the commission noted that the nine firms named were among the 159 companies that won Ministry of Health or Regional Health Authority contracts to purchase equipment or provide various services during the four-year period.

However, investigations showed that none of the nine was registered with either the Registrar General’s Department of the Ministry of Legal Affairs, Board of Inland Revenue or the VAT Administration Office, the report indicated.

“Please be advised that our records show that none of the nine businesses mentioned in the subject letter are (sic) registered for VAT purposes,” the probers were told.

The VAT Office added that if any of the entities were foreign businesses that did not make supplies within T&T there would be no need for them to be registered.

Also “if any of these names are trading names only, then it is possible that the businesses could be registered in the name of the owner or owners.”

Clarification was sought with the Registrar of Companies, the report stated, and it was learnt there were only records dealing with Hermes Ltd-H 9031, MDC-UM and Calmaquip of the nine “phantom” companies being tracked.

The commission learnt Hermes was incorporated on August 28, 1996 under the Companies Ordinance but since no documents had been filed at the Companies Registry since July 21, 2000 it gave rise to the “prima facie presumption that it is inactive.”

Yet another, Hermes Ltd, had been incorporated in April 1977, but was struck off the register in December 1991.

With respect to MDC-UM no evidence of registration or incorporation was found, and while the possibility existed it could be a division of Metal Designs and Concepts Ltd (MDC) the point was moot, the registrar indicated.

Universal Metal Ltd company was registered in 1977, but was struck off, effective October 13, 1994.

The Registrar further informed the commission: “Please note that the reason why there is no record of the registration/ incorporation of some of the entities mentioned above could be that they are registered/ incorporated in overseas jurisdictions.

“Even so they ought to provide proof of registration/incorporation in the relevant overseas jurisdiction when bidding for contracts, tenders, etc.”

None of the nine companies had files at the Board of Inland Revenue, the commission learnt.

Calmaquip was not further mentioned, but principals of this firm, which was involved in the controversial Piarco Airport expansion project, have been caught up in legal proceedings in the USA in recent times.

According to the report: “The commission views the spectre of ‘phantom’ companies operating in the health sector as a grave matter that calls for further investigation and appropriate action by the authorities.”

In laying the report of the commission, which was chaired by retired Justice Gladys Gafoor, in the Lower House on Friday, Prime Minister Patrick Manning indicated that “in view of the allegations contained, and for the purpose of total transparency,” the Integrity Commission, Director of Public Prosecutions and Commissioner of Police would be sent copies.

The way out of the corruption morass was for the Government to source equipment directly from manufacturers overseas, through the country’s diplomatic missions, as was done in other sectors of the economy, the report said.

According to the commission, this method would avoid the health sector “being at the mercy of sales representatives and the commission agents of local and foreign firms.”

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