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THURSDAY, NOVEMBER 17, 2022
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Bahamas liquidators detect ‘serious fraud’ signs at FTX By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
• Yet to gain full control of local subsidiary’s assets • Legal filings hint at control battle with Chapter 11 • SBF probed for US law breaches before collapse
FTX’s Bahamian provisional liquidators have yet to gain control of all its assets amid signs that “serious fraud and mismanagement” may have caused the group’s collapse, it has been revealed. Brian Simms KC disclosed in a November 15, 2022, affidavit filed with the southern New York federal bankruptcy court that the provisional liquidators presently cannot determine the financial position of FTX Digital Markets, the group’s Bahamian subsidiary, because they lack access to the necessary documents and other information. The Lennox Paton senior partner, who is working with PricewaterhouseCoopers (PwC) duo, Kevin Cambridge and Peter Greaves, on FTX Digital Markets’ provisional liquidation made the disclosures in legal filings requesting that the US court recognise them and
the Bahamian liquidation as “a foreign main proceeding” under American federal bankruptcy laws. This will affirm the trio as FTX Digital Markets’ foreign representatives in the US, and thus enable them to secure bank accounts and other assets; trace money flows; issue any subpoenas that are necessary; and obtain all relevant documents that will aid with the Bahamian subsidiary’s likely full liquidation and winding-up. And the Bahamian provisional liquidators’ filings also hint at a potential battle for control of FTX’s insolvency
proceedings, and the group’s remaining assets, with the Chapter 11 bankruptcy protection proceedings initiated by the failed crypto exchange last Friday. Those proceedings are before the Delaware federal bankruptcy court, and Mr Simms’ affidavit alleged that only he could have authorised the Chapter 11 filing given his appointment as provisional liquidator by the Bahamian Supreme Court the day prior. Such permission was not granted, and he “rejects the validity” of any efforts to place FTX’s affiliates in Chapter 11 protection.
SEBAS Bastian last night said his Brickell Management Group (BMG) had “a bitter taste in our mouth” after losing money on the $6.4m contract to construct 213 dome homes in Abaco post-Hurricane Dorian.
The Island Luck principal told Tribune Business that Brickell was still owed funds by the Government after seeking to perform what he branded “a national service” through acquiring - then installing - “a massive housing solution” in the aftermath of the devastation inflicted by the Category Five storm. He added that constant changes demanded by the Government to “the scope
BRIAN SIMMS KC Mr Simms argued that control of FTX Digital Markets and the crypto exchange’s worldwide operations resided in The Bahamas since Sam Bankman-Fried, its cofounder and chief executive until last Friday, together with senior management all resided here. As a result, the focal point of efforts to wind-up FTX in an orderly fashion should be The Bahamas rather than the
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of work”, as well as the failure to make timely payments to Brickell, led to the group walking away from the dome home construction deal. Mr Bastian, though, said the group handed over all the construction materials it had imported to the Government’s agencies, and provided invoices that could account “for every single screw”.
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SEBAS BASTIAN
‘Not out of woods’ despite lowest deficit for 10 years By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Prime Minister yesterday warned Bahamians “we are not yet out of the woods” as he hailed the lowest first quarter fiscal deficit “in more than ten years”. Philip Davis KC, addressing the House of Assembly after the deficit for the three months to end-September 2022 shrank by some 85 percent year-over-year, urged that “we must not lower our guard” despite the improved outturn given that multiple global headwinds and economic risks confront The Bahamas. The deficit, which measures by how much
PHILIP DAVIS KC government spending exceeds its tax and fee income, contracted from $136.4m in the three months to end-September 2021 to just $20.6m for the 2022-2023 fiscal year’s first quarter. The marked improvement was driven
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BTC revenue growth slows to only 1.3% By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Bahamas Telecommunications Company’s (BTC) year-over-year revenue growth slowed to just 1.3 percent year-over-year for the 2022 third quarter even though it remained ahead of prior year comparatives for the first nine months. The Bahamian carrier’s ultimate parent, Liberty Latin America (LiLAC), unveiling its quarterly and year-to-date results for the nine months to end-September 2022, revealed that BTC’s top-line income grew
by less than $1m for the former period when measured against 2021 figures. Revenues for the three months to end-September were just 1.3 percent higher year-over-year at $48.4m, as opposed to $47.8m in the prior year’s third quarter. For the first nine months, BTC’s revenues are 2.8 percent ahead of 2021 at $144.5m compared to $140.5m in 2021. The year-over-year top line rise is some $4m, with the carrier likely on course to deliver full-year revenue of between $190m and $200m with the busier Christmas
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Pintard says minister ‘misled House’ on BPL fuel hedging • Gov’t ‘rejected’ plan ‘to save Bahamians $100m’ • Sears: Strategy ‘not in best interest’ of country • Blames PM, finance for decision long denied
Sebas: $6.4m Abaco dome contract leaves ‘bitter taste’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
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By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Opposition’s leader yesterday accused a Cabinet minister of “misleading Parliament” after he admitted the Davis administration rejected proposals “that had the potential to save the MICHAEL PINTARD Bahamian people $100m”. Michael Pintard yesterday told Tribune Business that himself and other Opposition MPs were left “stunned” after Alfred Sears KC, minister of works and utilities, conceded that the Ministry of Finance - headed by Prime Minister Philip Davis KC - had dismissed recommendations to continue the trades underpinning Bahamas Power & Light’s (BPL) fuel hedging initiative as “not in the interests of the country at that time”. The Free National Movement (FNM) leader said that apart from placing the blame on the Ministry of Finance, and seemingly throwing the Prime Minister under the proverbial bus, Mr Sears had also admitted that which he and Mr Davis have spent weeks denying - that they ever saw, and/or reviewed, recommendations to execute the rolling series of BPL fuel purchases that were scheduled for September and December 2021. Executing these trades would have secured BPL extra fuel volumes at below-market prices, just as global oil costs were starting to spike, enabling it to keep its fuel charge in a
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