Belmont Jackass?

Among his many hits were: “Glory, Mama, Glory’, ‘Jonah and the Bake’, ‘Michael’, ’Creature from the Black Lagoon’, ‘Melvina’, ‘Gloria’, ’Crazy Love’, ’Peddlars’, ‘Booboo Man’, and ‘Shame and Scandal’.

The last two named songs were made famous by Harry Belafonte, who was so impressed that he contracted him as a composer.

Melody and The Mighty Sparrow (Mr. Slinger Francisco) used to throw friendly barbs at each other in song, much to the delight of calypso fans in Trinidad and elsewhere.

One such song was ‘Belmont Jackass’ (Belmont is a part of Port-of-Spain) in which Melody described Sparrow’s wife as being drunk, loose and ugly. Its chorus ends like this:

“She should wear a harness, she face like a mas’.

That is why he (Sparrow’s) friends does call she… Belmont Jackass”.


In St. Kitts, there’s a place called Belmont Estate. It’s a place of past and present importance. So we need to keep a close eye on it.

The Estate is the site of the Kittitian Hill Development, which is the brainchild of Mr. Valkimi Kempadoo, a Trinidadian entrepreneur.

He had two companies formed, namely, Belmont Resorts Limited (the developer, ‘BRL’) in 2004, and Belmont Construction Limited (the contractor, ‘BCL’) in 2006.

He worked very hard to get the Development underway, but he ran into a number of road blocks, not the least of which was financial. Finally, with the help of a loan of EC $14,791,681.00 from the Sugar Industry Diversification Foundation(SIDF) on 20th August,2010,bearing interest at 5% per annum, and payable in annual installments over a period of 24 years, BRL received a much-needed shot in the arm.

But someone wanted the SIDF to do more than just loan money to BRL, so on that same day, 20th August, 2010, the SIDF bought 3,616,623 BRL shares for EC$14,583,310.00 ($4.03 each), and became 60.42% owner of the Company.

The shares were bought from:

(i)           Able Engineering Limited       2,386,291 shares;

(ii)          Anselm La Touche limited         781,332 shares; and

(iii)         Dominion Capital Partners Inc. 449,000 shares.

What formula did the SIDF use to come up with a value of EC$4.03 per share? The Company had been formed in 2004 with shares set nominally at EC$1.00 each, then this was changed to US$1.00 each in 2007.And as far as I’m aware, the Company always struggled.

Further, just three months after the SIDF had bought the shares, unaudited reports indicated that BRL had $37.98 million in assets and $36 million in liabilities, for a net worth of $1.98 million as at 31st December, 2010.

At that net worth, 60.42% of the Company would be valued at $1.2 million, and each share at about 33 cents. And even if you spike up the value on the basis of strong signs for the Development and from the market, it’d be a stretch, at least in my layman’s mind, to reach EC$4.03 per share.

And even if, before the $14,791,681.00 loan from the SIDF, with BRL’s liabilities at about $21 million ($36 million less the $14,791,681.00), then its net worth would’ve been about $16.9 million. And 60.42% of that net worth is about $10.2 million, for a value of about $2.82 per share, which is still $1.21 short of the $4.03 at which the shares were bought by the SIDF.

It may be that I’m missing something here, and that a perfectly plausible pricing methodology that was applied. I’d love to hear it.

Meanwhile, the sale of the shares put effective control of BRL and the Kittitian Hill Development into the hands of the Prime Minister of St. Kitts & Nevis, who seems to be using the SIDF, inter alia, to build himself a political fortress.

Now the SIDF’s Financial Statements for 2010, at the Balance Sheet and at Note 11, refer to this transaction as an “Investment in Associate”. Does that term appropriately describe the SIDF’s investment in BRL? Maybe, but on the face of it, it seems odd. Again, let’s get educated on this.

But more happened on 20th August, 2010.

The SIDF also entered into an agreement with Terra Forma International Corporation (TFIC), another Kempadoo company which, at the time, owned the remaining 39.58% of BRL’s shares. In that transaction, the SIDF agreed that 1,416,623 of the 3,616,623 shares which it bought on that same day from Able Engineering, Anselm La Touche and Dominion Capital Partners would carry no voting rights on any decision relating to the day-to-day operations of BRL.

In other words, although the SIDF now owned 60.42% of BRL, it would only have a 36.67 % vote in matters relating to BRL’s day-to-day operational matters.

Now, bear in mind that BRL had serious cash, and other operational, problems and was in dire straits. Nevertheless, the SIDF was persuaded to agree:

(i)           to loan it over EC$14 million on relatively gentle terms;

(ii)          to buy 60.42% of its shares and cash out three major shareholders; and yet, incredibly, after all of that;

(iii)         to vote only as a minority shareholder in relation to day-to-day operational decisions which perhaps were the very reason BRL had gotten into trouble in the first place.

But for agreeing to weaken its own position in BRL, what did the SIDF get in return from Terra Forma in this agreement? Nothing as far as I am aware. So what kind of agreement was that?

Since the SIDF has started coming out of the closet, we’ve heard its CEO, Mr. Terrance Crossman, say that it owns 90% of BRL. So maybe more shares have been purchased since 2010.If so, at what price?

We also know that Kittitian Hill is an approved project under the Economic Citizenship Program, and that through its agents; it’s been telling the world that it has a unique citizenship product, as follows:

Companies can be formed to own each unit in the Development. Each company will carry ten preference shares, each priced at US$400,000.00, and redeemable, without dividends, by BRL after five (5) years, with no voting rights. So a unit can have as many as 10 preference share holders at a time, and yield for BRL as much as US$4,000,000.00 in relation to those 10 persons.

The buyer of each preference share gets a passport (along with spouse and dependents, if any). And once redeemed (if BRL doesn’t have the money to do this, maybe the SIDF money will be used), then the share can be sold to a new buyer who (along with spouse and dependents, if any) will get a passport, and on and on and on. This means that every five years, a unit can yield a minimum of 10 citizenships. So if there are, ay 40 units at Kittitian Hill now, they can produce at least 400 citizenships and US$160 million every 5 years, ad infinitum.

As it is, the whole thing is, in my opinion, too open-ended. A limit needs to be placed on the amount of citizenships to be granted. Further, it’s somewhat discomfiting when the selling of passports becomes a country’s main industry.

Notably, the law, which came into effect on 1st Janaury,2012, allows someone to buy a piece of real estate in and approved project, and to sell it after 5 years, with the new owner being eligible to apply for citizenship (for himself or herself , and spouse and dependents, if any), and on and on. So that each unit can, under the law, yield at least 1 citizenship every 5 years…far less than the minimum of 10 at Kittitian Hill.

I don’t know what legal authority BRL has the right, worse so the exclusive right, to offer this product. Surely, concern will be raised by other the developers of other approved developments.

But there are other aspects of the SIDF, Belmont Construction Limited (BCL), and BRL story which also warrant our attention at this time.

Mr. Joseph Edmeade and Mr. Terrance Crossman are two of the SIDF’s five Councilors. In November, 2011, I believe that the said Mr. Edmeade (if this is the same Joseph Edmeade) was Cabinet Secretary, and Mr. Crossman was CEO at the St. Christopher Air & Sea Ports Authority (SCASPA). I take it that at that time they were also SIDF councilors.

In official documentation for November, 2011, BCL named both gentlemen as employees. Were they regular employees, or directors, of BCL? And if so, why? Or was the information documented incorrectly? A simple explanation would help.

The SIDF’s Financial Statements for 2010 make no mention of it having bought shares in BCL. Did it do so after 2010? Will we see evidence of this in its statements for 2011? And if so, why would the SIDF buy shares in BCL when it already controls the project and can hire and fire contractors?

Then although the SIDF’s Financial Statements show that on 20th August,2010, it became the owner of 60.42% of BRL, and just a couple of weeks ago, Mr. Crossman said publicly that the SIDF now owns 90% of BRL, we see nevertheless from certain documentation for 2011 that the SIDF is not recorded as a member(shareholder) of the Company. How can that be?

Indeed, the documentation tells us that the members of BRL are Valmiki Kempadoo, Richard Henry, Hayden Kublal Singh, Joseph Edmeade and Terrance Crossman.

I’m pretty sure that in the case of Messrs. Edmeade and Crossman, this is an error.

And two other things catch the eye in the BRL documentation:

(i) the date of birth of a particular individual is listed as 31st February (I’ll leave the year out); and

(ii) a particular individual is listed as having become a director a year before the Company was formed.

I’m pretty sure there’s a logical and acceptable explanation for all of this. Maybe there’ve been some errors and oversights. Maybe some miscalculations. But maybe there are things that we’re just not getting, and just not understanding.

We need clarification and, where necessary, explanations. So let’s hear them.

Because we don’t want Lord Melody to rise from his grave and sing a new version of ‘Belmont Jackass’ on us.


Leave a Reply

Reset password

Enter your email address and we will send you a link to change your password.

Get started with your account

to save your favourite homes and more

Sign up with email

Get started with your account

to save your favourite homes and more

By clicking the «SIGN UP» button you agree to the Terms of Use and Privacy Policy
Powered by Estatik
error: Content is protected !!