Thursday, October 20, 2011

Court told Christopher Ram paid himself 50% of Hotel Tower revenue while acting as Receiver/Manager

THE claim filed by Cara Investments Limited against Christopher Ram and Scotia Bank Limited was again called before Chief Justice (ag) Ian Chang, and counsel for the plaintiff yesterday sought to establish that Ram arrogated to himself an authority that he did not have, even as he failed to perform his obligatory functions. Cara Investments Limited is suing Christopher Ram for his conduct when he was receiver of Hotel Tower. Their claim is that he breached the contract he had with them when he had invited public bids for the sale of Hotel Tower.
Cara Investments Limited is being represented by Attorneys-at-Law Sanjeev Datadin and Fenton Ramsahoye, while Ram is now being represented by lawyers Mc Kay and Luckhoo.
Mr. R. Fields, S.C., is appearing for Scotia Bank.
Datadin yesterday continued cross-examination of Ram with the purpose of pointing out whether or not the defendant had the authority to exercise certain powers, whether he failed to exercise powers that he should have properly exercised, and whether his involvement in the transaction was in accordance with all the powers he would have had.
Ram is reportedly claiming he had certain powers which were not contained in the ‘debenture’, a document that gives him his powers.
The allegation by Cara is that Ram aborted a process for no apparent reason, and engaged in an entirely different process that took years for completion. “The essence of it would be why he did that. We don’t know; maybe the court can tell us,” Datadin offered, while responding to queries by this newspaper following yesterday’s proceedings.
The lawyer said his clients felt aggrieved by such actions because, as hoteliers, they had put up every document Ram had asked for, including proof of their financial backing.
Datadin further claimed that Ram did not give a fair answer on how he obtained the position of receiver/manager. “Receiver/manager means you are receiver and manager. He explained being a receiver, but couldn’t explain being a manager.”
At this stage of the case, when Chief Executive Officer of Cara Investments Limited, Paul Stephenson, shareholder Johnny Carpenter, and a valuator have given evidence, counsel for the plaintiff is trying to show more and more that the actions taken by Ram were not within his authority.
Datadin observed that Ram told the court on the previous occasion that three staff members of Ram and McRae were paid by Hotel Tower. However, Ram yesterday testified that that was “absolutely incorrect.”
Datadin reminded Ram that, when he was giving evidence, he told the court he had introduced three members of his staff for middle management positions. Ram said he did so testify, but he denied saying that those employees’ services were paid for by Hotel Tower.
The lawyer reminded Ram that he had given testimony to the effect that, at several times, he was required to have four members of his staff at Hotel Tower. Asked who paid for the presence of those individuals there, Ram responded that they were paid by Ram and Mc Rae.
Ram was further asked if he had filed any financial statements in the High Court Registry during the time he was running the business. He responded that he had so done, but could not say if he had disclosed in them what sums were paid to staff.
In his testimony, Stephenson, owner of a string of hotels in the Caribbean, said he had examined the financial projections for Hotel Tower which Ram had circulated to investors, and had found those figures to be overly ambitious and unlikely to be achieved. He attributed that situation primarily to Ram’s inexperience and inability to appreciate the hotel industry in Guyana.
Stephenson said the figures incorrectly placed emphasis on the non-core business of hotels, namely food and beverage sales, and that the financial projections Cara had submitted to Ram when he was Receiver of Hotel Tower were lower and more realistic.
Stephenson further testified that he had examined the actual financial report for Hotel Tower for a period when Ram was Receiver and that those figures were far below Ram’s own projections.
Stephenson also said that Ram had restructured operational methodologies and had used a management model and style that had been untested. This, Stephenson claimed, was unlikely to be successful because it did not focus on the core business of average room rate and average occupancy.
The case will continue on November 21.

1 comment:

  1. The ACCA in England should be informed of this as Christopher Ram is breaking the rule of the ACCA Code of ethics.