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MONDAY, FEBRUARY 26, 2024
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ArawakX ‘to be reported’ to police amid $4m insolvency By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Bahamas’ first-ever crowd funding platform is suffering from a near-$4m insolvency, its provisional liquidators have asserted, as they prepare to report “multiple criminal infractions” to the police. Ed Rahming, the Intelisys (Bahamas) principal, and Cheryl Simms, the Kikivarakis and Company accountant, in their February 22, 2024, report to the Supreme Court revealed that ArawakX’s insolvency has almost doubled from the Securities Commission’s initial $2m estimate after they wrote-off more than $1m in assets listed on its balance sheet. This leaves the platform and its parent, MDollaz Ltd, with just $508,665 in assets to cover $4.474m in total liabilities, thereby producing a $3.965m deficit with the provisional liquidator duo warning this gap is only likely to increase since “significant sums [are] owed to third parties”. Mr Rahming and Ms Simms said it was also impossible to cure MDollaz/ ArawakX’s “criminal violation” of
• Supreme Court told $2m hole has doubled • Just $500,000 assets to cover $4.74m liabilities • 16 breaches of Securities Act are alleged in report • Public offering ‘against company’s own rules’ the Securities Industry Act as a result of the unauthorised public offering that persuaded 134 investors to inject capital into the crowd-funding platform. Those investors are now in peril of losing much, if not all, of their investment as the provisional liquidators have received a legal opinion saying they should be treated as unsecured creditors (see other article on Page 1B).
The duo’s report also alleged there was “substantial commingling” of funds belonging to ArawakX itself and those entrusted to it by investors in the share issues it facilitated. The latter should have been held separately by the crowd-fund platform, which would have been acting in a trustee or fiduciary capacity, but Mr Rahming and Ms Simms are alleging that “over $1m of fiduciary cash was used on company expenses”. Their first Supreme Court report identified no fewer than 16 purported breaches of the Securities Industry Act, its accompanying regulations and rules by ArawakX, whose principals are D’Arcy Rahming senior, the former Bahamas International Securities Exchange (BISX) chief operating officer, and his son, D’Arcy junior. The alleged violations, according to the provisional liquidators, ranged from failing to safeguard, segregate and maintain proper controls to secure client funds; not obtaining Securities Commission approval for Board and corporate governance changes; and not paying distributions to investors on time or returning
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More than 100 investors at risk of losing crowdfund investment By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A FORMER Colina Insurance Company chief and at least 115 fellow investors are in peril of losing most, if not all, their combined $2.4m-plus investment in the insolvent ArawakX crowd-funding platform. Ed Rahming, the Intelisys (Bahamas) principal, and Cheryl Simms, the Kikivarakis and Company accountant, in their February 22, 2024, report to the Supreme Court in their capacities as provisional liquidators disclosed legal opinions finding that James Campbell and his
investment vehicle, PJ Enterprises, are unsecured creditors for much of their $1.619m investment. They were also informed that the majority of other investors who acquired shares in ArawakX, some 115 of 134 persons, should definitely be treated as unsecured creditors after parting with a collective $817,712 to purchase equity stakes in the crowdfunding platform. Given that ArawakX already has a near-$4m solvency deficiency, which is likely to only increase, prospects of substantial recovery appear bleak.
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Project’s 15,000 acres for sale over ‘failure to pay’ property tax By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A MAJOR Long Island investment project’s near15,000 acres has been advertised for sale via auction by the Government authorities to clear an allegedly unpaid real property tax debt. The Department of Inland Revenue, in last Thursday’s listing of 122 delinquent commercial properties and vacant land that it plans to sell on April 2, 2024, included a 14,720-acre parcel “formerly known as Diamond Crystal properties between Galloway Beach and Wells Point” on Long Island. The
property was said to have an appraised value of $21m. Tribune Business research found the same site was touted as the location for a major investment project as recently as the Long Island Business Outlook conference on November 16, 2023. The acreage listed in the Department of Inland Revenue advertisement matches exactly the number given by Geoff Fulton, chairman of Maritek Bahamas, for his Chrysalis project. Mr Fulton said then that he planned to segment the 14,720-acre parcel into two, featuring a 11,720-acre environmental preserve
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Liquidators ‘blocked as ArawakX set up similar operation in US’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net ARAWAKX’S provisional liquidators have accused the crowd-funder’s principals and owner of its website of colluding to deny them control of the platform while setting up a similar US-domiciled operation. Raynard Rigby KC, attorney for Ed Rahming and Cheryl Simms, in separate February 2, 2024, letters demanded that D’Arcy Rahming senior and his son, D’Arcy junior, together with California-basedCloudPro, “immediately deliver to them the password(s) and other credentials” his clients need to assume control of the ArawakX platform as well as restore “the functionality” that was removed. The Baycourt Chambers principal’s letter also revealed how Mr Rahming, the Intelisys (Bahamas) principal, and Ms Simms, the Kikivarakis and Company accountant, met with Mr Rahming senior and others on January 18, 2024,
to voice their concerns and suspicions that ArawakX assets were use to finance the creation of a US company whose website is “a duplicate” of the Bahamian crowd-fund platform. “We are instructed that at a meeting held with you (and others) by the joint provisional liquidators on January 18, 2024, the joint provisional liquidators shared with you their findings that the assets of ArawakX were used to fund the start-up and operations of a US-based company called Local Investment Hub (LIH),” Mr Rigby told Mr Rahming senior in a letter copied to both his son and their attorney, Khalil Parker KC. “It appears from the records obtained that you and D’Arcy Rahming junior are noted as officers of LIH. The joint provisional liquidators also discovered that the assets of ArawakX were used to fund the operations of LIH. “It was also brought to your attention that LIH’s website is a duplication of the website used
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