EMBD without board as court hears cartel lawsuit against Moonilal, contractors

The High Court has been told that the state-owned Estate Management and Business Development Company Ltd (EMBD) is currently operating without a board of directors, following the resignation of its previous board after the recent change in government.

At a case management hearing before Justice Frank Seepersad on June 17, King's Counsel Andrew Hunter, who represents EMBD, said the board stepped down on April 28, shortly after the general elections. Since then, no new board has been appointed.

Hunter said this situation has created short-term challenges for EMBD, especially when it comes to approving legal documents and spending on expert advice for the case.

He said that while the team had standing instructions to appear in court for the hearing, it could not make new decisions that require board approval until a new board is in place.

Hunter said that they hope a new board will be appointed by the end of July, but could not give an exact date, as this depends on the government.

Before the judge is the EMBD’s multi-million dollar cartel claim lawsuit against current Energy Minister Dr Roodal Moonilal, several contractors and former EMBD executives.

At the June 17 hearing, Seepersad accepted a proposed timeline from EMBD’s legal team to file replies in the case by September, assuming a board is appointed by then.

He said the suggested dates were fair, but stressed that this was one of the oldest matters before him, and he does not intend to let it drag on.

The matter has been adjourned to November 24 for further directions or a decision on the replies.

Seepersad also expressed concern over Moonilal’s absence at the case management hearing. He was told the minister had prior commitments. But, Seepersad said all parties are expected to attend unless there are exceptional circumstances. He said under the Civil Proceedings Rules (CPR), active case management should occur in the presence of all litigants, and such expectations would apply to all matters listed before him. “I am very much not satisfied when I'm being told that persons have commitments that seem to obviate their ability to appear before the court,” he said. The judge advised that necessary arrangements must be made in advance.

After it was determined that all defences had been filed in the various claims and counter-claims, Hunter said the EMBD would only be replying to those filed by the corporate entities on specific points raised, such as issues around defects, compliance, and supervision. He proposed to circulate draft replies by September 12, allow objections by September 26, and file final replies or applications for permission to reply by October 10.

The matter was adjourned to November 24 for either a ruling on the replies or to give further directions after Seepersad said the proposed schedule was “eminently reasonable” and aligned with the court's aim to advance the matter.

However, the judge warned against further delays as he said the law clearly outlined what should be included in replies. He also discouraged actions that could lead to another prolonged appellate process.

In February, the EMBD amended its claim against Moonilal and the others, alleging that the then-Minister of Housing under the People’s Partnership regime acted as a “shadow director” of the company, with senior management taking instructions from him on the award and administration of contracts.

It further alleged that Moonilal and former EMBD executives participated in cartel arrangements that unfairly favoured contractors.

Allegations under the Integrity in Public Life Act included claims that Moonilal failed to disclose secret payments made to him or his political party. The amended lawsuit also included claims that a contractor facilitated bribes, including a house allocation by the Housing Development Corporation (HDC) and allegations that EMBD contractors made substantial payments to individuals and entities linked to Moonilal and his political party.

Allegations against the minister and some of the others are claims of dishonest assistance, bribery, and knowing receipt, as well as demands for the return of funds allegedly received through fraudulent means.

The case has been stalled with several legal challenges, and a trial date has not yet been finalised, although it was given the green light after the Privy Council, in October 2024, refused permission for some of the accused contractors to appeal the Court of Appeal’s decision that upheld the lawsuit against them. The Privy Council ruled that their application did not raise an arguable point of law or a matter of general public importance.

That decision meant that Moonilal and the other defendants had to file their defences if they had not already done so.

The contractors – TN Ramnauth & Company Ltd, Mootilal Ramhit and Sons Contracting Ltd, Fides Ltd, and Kall Company Ltd (Kallco) – had argued before the Court of Appeal that the lawsuit should be struck out or, at the very least, the EMBD should provide more specific allegations so they could properly defend themselves.

However, in January 2024, Justices of Appeal Charmaine Pemberton, Peter Rajkumar, and Vasheist Kokaram upheld a 2020 ruling by Justice James Aboud, allowing the case to proceed.

The lawsuit is centred around 12 road rehabilitation and infrastructure contracts awarded to five contractors in the months leading up to the September 2015 general election.

Three contractors – TN Ramnauth & Company Ltd, Kallco, and Mootilal Ramhit & Sons Contracting Ltd – had originally taken legal action against EMBD to recover an estimated $200 million in outstanding contract payments. The EMBD countersued with the cartel claim.

The lawsuit names Moonilal, former EMBD CEO Gary Parmassar, ex-divisional manager Madhoo Balroop, and engineer Andrew Walker, as well as Fides Ltd, and Namalco Construction Services Ltd, as defendants. The case against the others was also amended.

In its original case, the EMBD alleged Moonilal and the other defendants engaged in fraudulent conduct to manipulate the contracting process. The state enterprise claims that the contractors secured lucrative contracts through unlawful means, including conspiracy, knowing receipt, and dishonest assistance.

The defendants, however, have consistently denied any wrongdoing and have argued that the case against them lacks merit and should be dismissed.

On June 12, Minister of Legal Affairs Saddam Hosein said the EMBD was one of 18 state-run companies in breach of the Companies Act, having not filed annual returns.

On June 17, neither Hosein, who is Minister in the Ministry of Agriculture, nor Minister Ravi Ratiram immediately responded to queries on the appointment of a new EMBD board. The Agriculture Ministry is the line ministry for the EMBD, according to Gazette Notice 81 on May 23.