Sport Company conceeds at LifeSport trial: 'Beneficial owner is the corporation sole'

THE Sport Company (SporTT) have conceded that the “ultimate beneficial owner” of its shares is the Ministry of Finance as corporation sole.

The concession was made on September 23, at the start of the eighth day of its $34 million claim against 13 former board members and its former CEO for alleged breach of fiduciary duty arising out of the failed LifeSport programme.

SporTT’s lead attorney Colin Kangaloo, SC, was called on by attorneys for the ex-directors to make the concession. The issue of SporTT’s share ownership has been raised at the trial.

Kangaloo’s concession was contained in a letter in response to a request for disclosure from attorneys for the ex-directors. He admitted the concession “overrides everything.”

In that letter, attorney Stephanie Moe, for SporTT, said after a specific search of company documents, it was revealed that the shares held by one of three named shareholders were “held on trust for the corporation sole.”

“It also concedes that the ultimate beneficial owner of the shares is corporation sole.”

Moe said, “ The non-disclosure was based on an oversight by the claimant and we wish to assure you that, like you, in good faith, we are seeing the documents for the first time.”

Also testifying on September 23, was ex-directors Milton Siboo and Norris Blanc.

The two, along with former chairman Sebastian Paddington, ten others and ex-CEO John Mollenthiel have been accused of negligence and breach of fiduciary duty by the company.

The case against the 14 concerns a $34 million contract to eBeam Interact Ltd which was hired to provide technical, literacy and numeracy services for LifeSport.

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

Siboo said he relied on the information received from the Ministry of Sports when the board received the justification for the sole selection of eBeam.

He also said being a non-executive director, he did not ask to see documents relating to the sole selection and interpreted it as a “directive coming from the ministry” to engage eBeam.

He disagreed with assertions from SporTT’s attorney John Lee that he was negligent in his actions as a director or that the company suffered a loss as a result.

In his testimony, Blanc said it was not the practice of the board to see contracts since a non-executive board did not “descend into day-to-day operations of the company.”

“It was our clear understanding we were not to get involved.”

He said directors were “political appointments” and as a board, “We wanted to stay clear on how contracts are structured.” He also described what SporTT contends were “errors” in the justification for sole select and eBeam’s proposal for the LifeSport programme as “discrepancies.”

The trial continues on Wednesday when the former SporTT corporate secretary is expected to give evidence. Justice Ricky Rahim is presiding over the trial.