Ex-directors: Errors in $34m LifeSport proposal 'minor'

ERRORS in the justification for the sole selection of eBeam Interact and its proposal as the $34 million contractor for the LifeSport programme were not “significant,” two former Sport Company (SporTT) directors have said.

Sabrenah Khayyam and Matthew Quamina testified on September 17, the sixth day of the SporTT’s negligence and breach of fiduciary duty claim against them and 12 others.

Khayyam and Quamina were questioned by SporTT’s attorneys Colin Kangaloo, SC, and John Lee.

Khayyam said she was told SporTT was a payment provider and she did not ask questions on the evaluation of eBeam's proposal to provide technical, literacy and numeracy services for LifeSport or the justification for sole selection.

“We were hopeful the evaluation was done by the Ministry of Sports. I know it would have been dealt with by the ministry.”

She also said she did not question the directive given to SporTT to approve eBeam on sole select, as it was a directive to the board and there was Cabinet approval for the award.

On the errors in the justification for sole select, Khayyam admitted there were a few, but said they were “not a big amount.”

“I do not think they were significant.”

She also said it was not for the board to raise questions, as they were non-executive directors.

Khayyam also admitted there was no legal advice on the first $17 million payment to eBeam “because work was being done,” but said there was advice on the second tranche.

She denied she and her fellow board members acted unreasonably, were in breach of their duties under the Companies Act or were negligent in their actions.

“We received a directive.”

She also denied SporTT suffered a loss because of the contract.

Questioned by Senior Counsel Anthony Vieira, who represents one of the ex-directors, Khayyam said SporTT’s mandate was to implement construction projects for the ministry, including stadiums and regional sports centres.

“Some were mega-projects involving significant sums.”

She said as a director, she could not decide “not to build a stadium and put up a pickleball court instead.”

Financing for LifeSport and the other projects were arranged by the Ministry of Finance, as corporation sole, which also appointed the board.

“We could not modify or not support, follow a directive. We had to follow…We were called on to implement.”

Quamina, who, according to SporTT’s claim, raised questions about the justification for the sole selection of eBeam in e-mails to fellow directors, said he was expected, as a director, to bring “independent thought” in deliberations, but that did not mean he had to act “independently and in isolation.”

Quamina had approved the justification for the sole selection of eBeam, but advised that SporTT should ensure it had sufficient funding to finance the contract.

He said SporTT was “fully owned by the State,” and his role was not to question the ministry in the implementation of a national social policy.

He also admitted there were errors in the justification for sole select and eBeam’s proposal, but said those paled "in comparison to what the programme was in place for.”

Quamina also said the recommendation of eBeam would have been based on some instruction or recommendation from the ministry. He disagreed with Kangaloo’s assertion that the justification for sole select was not a directive or instruction from the ministry to award the contract to eBeam.

He also said SporTT was just the “payment facilitator” for the government. Quamina also said the contract should have an exit clause and he did not have to ensure this was done, since that was not his role.

“My role was to let the CEO ensure that this huge social programme was as tight as possible by time they finalised the contract.

“We were instructed to enter into this (the contract.” he insisted.

He maintained he and the other directors complied with the provisions of the Companies Act. Justice Ricky Rahim is presiding over the trial, which continues on September 18.

About the case:

SporTT’s claim is against its former CEO John Mollenthiel and ex-directors Sebastian Paddington, Chlea Lamsee-Ebanks, Reynold Bala, Morris Blanc, Nisa Dass, Anly Gopeesingh, Sabrenah Khayyam, Cheemattee Martin, Matthew Quamina, Annan Ramnansingh, Kent Samlal, Harnarine Seeram Singh and Milton Siboo.

It alleged that eBeam did not provide the services for the programme, which aimed to transition unemployed young men to responsible adulthood by providing sport training, occupational skills training and job placement.

It also claimed that Mollenthiel and former board members should be held liable for entering into the contract and are indebted to SporTT for $34 million.

The ex-directors have contended in their defence they were following the directives of the government.