Sunday, January 9, 2011

PNC Parliamentarian accused of fraud, mismanagement

- accused of mismanagement and fraud


Kadim ‘Kads’ Khan

A timber company has sued former PNCR’s Parliamentarian, Kadim ‘Kads’ Khan and his engineering company, Guysons, in excess of $43M, claiming mismanagement and fraud.
In court documents filed on December 21,2010, Tiger Wood Guyana Inc., a company based in Land of Canaan, East Bank Demerara, claimed that Khan laundered $41M through the bank accounts of the company while he served as Chief Financial Officer and Executive between June 2006 and last year.
The suit, filed by attorney-at-law Nigel Hughes, named Khan, of Lama Avenue, Bel Air Park, and Guysons Engineering Limited, West Ruimveldt, as the joint defendants, with the matter coming up again on February 2.
In its claims, it was explained that Tiger Wood was established on June 28, 2006 by Timothy Foster and Khan, who described himself as a banker and Chartered Accountant by profession, and founder of Guysons.
During 2006, Sir Shridath Ramphal, Hari Narayan ‘Ralph’ Ramkarran, John Willems, and Sir Ronald Sanders were appointed to the board of Tiger Wood, the plaintiff noted.
At the first board meeting held, Sir Shridath was appointed Chairman of the company and it was also decided that the company enter into a joint venture agreement with Iwokrama Sustainable Timber Incorporated (ISTI) for the harvesting and production of timber in a sustainable manner on various concessions owned by ISTI.
Tiger Wood claimed that Khan was allotted 5% (five per cent) of the shares of the plaintiff company and mandated as Chief Financial Officer to prepare monthly reports to the directors.
The company claimed that Khan further acquired his share within the company by transferring equipment from his company, Guysons, “arbitrarily” ascribing an “inflated value” of $30M.
Tiger Wood also claimed that Khan on June 15, 2007, “laundered and fraudulently converted the sum” of $41M through its accounts with a personal loan from Citizens Bank Guyana Ltd. and then used a cheque to withdraw the money and pay Guysons.
“The first named defendant (Khan) abused his position as Director and fiduciary to secure the said loan in his favor. The second named defendant (Guysons) utilised the plaintiff’s accounts for his own personal benefit. The first named defendant fraudulently suppressed the said transaction from the plaintiff’s auditors,” the plaintiff said in its claims.
Tiger Wood further claimed that in breach of the Board’s directives and resolutions and in breach of Khan’s fiduciary duties as an Executive Director, he failed to prepare monthly accounts for the year 2007, and failed to have audited accounts for the plaintiff prepared for the year 2007. During the years 2008 and 2009, he also failed to prepare any accounts prior to his resignation of the plaintiff.
“In an accounts ledger prepared by the first named defendant for the month of June 2007, the first named defendant fraudulently manipulated the plaintiff’s financial records when he described the aforesaid payment as a loan to the first named defendant by the plaintiff company. The first named defendant failed and or omitted to provide any particulars of the said loan or the basis on which the said loan was issued to the second named defendant.”
Tiger Wood claimed that there were several opportunities for Khan to inform the Board of the $41M transfer but he failed to do so.
Additionally, Khan was accused of wrongfully converting US$11,709 worth of Tiger Wood’s assets by shipping same to his address in the United Kingdom and without paying for them.
In 2009, the company said that Khan ordered Guysons to remove the generating set from its Land of Canaan premises, effectively bring the timber operations to a halt.
The company said that its loss of production and sales amount to $140M.
Khan was accused of “falsely providing the plaintiff’s creditors Bank Exim with a false schedule of the plaintiff’s assets which included properties not owned by the plaintiff. Intentionally refusing to provide the Board of Directors with monthly financial reports of the plaintiff’s worsening financial circumstances contrary to the Board’s directives.
Misrepresenting to the Board that order had dried up and impacted adversely impacted on cash flow when there were existing orders which the plaintiff had failed to supply.”
Tiger Wood claimed Khan in December 2009 directed Guysons, to remove the generators effectively “closing down the plaintiff’s operations, placing the plaintiff in further financial jeopardy in order to strengthen the first named defendant’s negotiation position with a fellow director for the acquisition of the first named defendant’s shares contrary to the best interest of the plaintiff.”
Tiger Wood, in its claim, asked the court for an order tracing all Khan’s “dealings and intromissions with its assets and the profits that would have been earned.”

No comments:

Post a Comment