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RECENT EVENTS

It is significant that Mrs. Knox owned about 15% of Kingsland Estates Limited shares, a percentage that has been diluted by issuing new shares to Classic, the mysterious company involved in what amounts to a virtual takeover of Kingsland, in order for this “impecunious” company to pay for financial statements from 1993 onwards. Several readers have remarked that they have never heard of a company other than Kingsland permitted to avoid filing financial statements by claiming to be unable to pay. Besides, the claim of the former directors that Kingsland is impecunious is at great variance with independent valuations and with existing offers and contracts on the land, not to mention millions in Barbadian lawyers’ fees! How can an impecunious company afford to pay millions in legal fees? What motivated Kingsland’s lawyers to persevere representing an “impecunious” company for years without being paid? An affidavit was sworn to the privy Council that the legal fees had not yet been paid after years of litigation.

Attempt at Receivership Thwarted by Prompt, Decisive Action of Barbadian Court System

The following notice was delivered to Mr. E.A.B. Deane at 9 AM on the morning of July 22nd:

In the matter of the receivership of Kingsland Estates Limited: Take notice that Winston M. Best and Douglas O. Skeete, Chartered Accountants, have been appointed joint receivers and managers of all the undertaking, property and assets of Kingsland Estates Limited effective Friday July 21st, 2006. Please direct all future inquiries or dealings with Kingsland Estates Limited to Mr. Best or Mr. Skeete as follows: Skeete, Best & Co., Chartered Accountants, 2 Medford Complex, Whitehall Main Road, St. Michael, Barbados, telephone 246-424-6626 or 246-425-5325, fax 246-425-5348 - wb.skeetebest@caribsurf.com

At 7:30 PM on the same day, a restraining order was delivered to Mrs. M. Knox to block the receivership. The Honourable Jacqueline Cornelius acted with amazing speed in this matter. No affidavit or details of the application were attached but it was expected they would be forthcoming on the following Monday. Handwritten as the last point of the restraining order was “That there be a speedy trial of the matter.”

“Impecunious” Company had Massive Accounts Receivable from the Government of Barbados

The Government of Barbados was challenged to provide details on what was apparently a previously undisclosed $22-million offer to a company, Kingsland Estates Limited, which recently has been characterized as “impecunious.”

And, related to the same matter, Prime Minister Owen Arthur was pressed to appoint his nominees to an international arbitration process to resolve the so-called Kingsland affair in which Canadian philanthropist and Barbadian resident Peter Allard was assisting a Barbadian widow who was told that her family’s shares in Kingsland are nearly worthless.

Several portions of Kingsland Estates (KEL) land have been expropriated over the years by the Government of Barbados but no compensation has been provided, in violation of both Barbadian law and a number of international agreements, including the Barbados-Canada Foreign Investment Protection Agreement - FIPA (also known as the Canada-Barbados Bilateral Investment Treaty or BIT).

The FIPA with Canada requires both countries to provide “diligent compensation at fair-market value” for expropriated property. (Though the Government of Barbados signed the treaty, it takes the position that there is no expropriation, as such, in Barbados . The Barbadian Government prefers the term “compulsory acquisition.”)

Allard, originally from Vancouver, then a resident of Barbados, had increased his presence in the Caribbean country over the years, most notably by contributing significantly to Barbadian charities and establishing and developing Graeme Hall Nature Sanctuary.

But his attempt to assist an elderly Barbadian widow led to the current confrontation with the Barbadian Government. Allard acquired his stake in Kingsland Estates Ltd. by covering millions in legal expenses incurred by Mrs. Marjorie Knox, a minority shareholder in KEL, a company founded by her father more than 60 years ago.

Mrs. Knox waged a more than decade-long battle in the courts for recognition of her claim that her minority rights were oppressed and the company was being taken over by corporate interests that would be able to buy the company and its land holdings for a fraction of its real worth.

At issue was the failure of the Government of Barbados to pay for several parcels of land belonging to Kingsland Estates Ltd. that were expropriated over a period of several years and the consequent suppression of the value of the Kingsland Estates Corporation.

According to Mr. Allard, his advisors learned of a $22-million offer apparently made by the Government of Barbados to some – though not all - Kingsland Estates Limited shareholders. “This offer belies the contention that Kingsland is an impecunious corporation,” said Allard. “The fiction that KEL is impecunious lies at the heart of this matter. While we are in no way suggesting that $22 million represents appropriate compensation for this land, even this initial offer indicates how the lack of compensation for the expropriated land has suppressed the corporation’s true value.”

Real Estate Appraisals

Valuations by two respected Barbadian real estate appraisers, Leonard St. Hill and Michael Parravicino, at various times, have assessed the entire KEL properties at between BD$220,000,000 and BD$357,000,000. Moreover, Barbadian Government agencies have been marketing the property internationally since 2003 using a property valuation of US$800,000,000.

“With numbers like that, how can anybody characterize Kingsland Estates Limited as near worthless and ‘impecunious?’” asked Allard.

While the Government has maintained that the Kingsland affair is entirely a private commercial dispute, it is clear that the Government’s role in this matter is substantial. In addition to its failure to meet its legal obligation to diligently provide compensation at fair-market value for Kingsland Estates property it has expropriated over the last several years, there is evidence of equally disturbing government inattention to key features of Barbadian commercial law.

Specifically, the Government was apparently willing to see the ownership of KEL change hands without requiring the company to produce audited financial statements for more than 12 years, and without evidence of the company holding valid meetings of its board of directors for more than a decade.

“The Government appears to be complicit in a transaction bereft of even minimum standards of transparency required in countries around the world,” said Allard. “This is something which should be a matter of concern to all Barbadians who rely on their Government to uphold laws which protect the interests of all citizens and assure foreign investors that Barbados respects and observes the rule of law.”

International Legal Help Sought

Allard’s law firm wrote to Prime Minister Owen Arthur and Attorney General Dale Marshall last year advising them that he had elected to proceed according to the Additional Facility Rules of the International Centre for Settlement of Investment Disputes, established by the World Bank to handle disputes between investors and contracting states, of which Barbados is one.

Allard’s lawyers also presented to the Government a list of suggested arbitrators for the dispute and asked the Barbadian Government to do likewise.

Some other reports mentioning the Kingsland story http://barbadosfreepress.wordpress.com/2006/09/01/worlds-investors-watch-barbados-court-case http://barbadosfreepress.wordpress.com/2006/09/03/barbados-court-considers-dispute-over-land-valued-at-almost-one-billion-us/
http://barbadosfreepress.wordpress.com/2007/05/29/barbados-lawsuit-names-prime-minister-owen-arthur-chief-justice-simmons-and-many-prominent-citizens-and-businesses/
SYNOPSIS

If you can shed any light on the reason for the HUGE discrepancy between independent appraised values and the price recommended by the directors, please let us know.
Disclaimer: The opinions expressed on this site are based on our interpretations of the documented facts. If anyone wishes to refute any of the content on this site, please contact us at keltruth@yahoo.com.

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Last modified on 2007-11-10 14:51:06 GMT. 1 comment. Top.