PHILIPSBURG--The Central Bank of Curaçao and St. Maarten (CBCS) has executed an investigation into the operations of St. Maarten Housing Finance Foundation, the financing arm of St. Maarten Housing Foundation, which falls under the Central Bank's supervision. From the undisclosed findings of that investigation the Central Bank has opted to end its contract with Taliesin Construction N.V. for the renovation of its building in St. Maarten as of April 17.
Central Bank President Emsley Tromp made it clear on Monday afternoon in a press conference held in the St. Maarten branch's temporary location in the TDC Building that early termination of its construction contract with Taliesin was enshrined in its agreement with the company signed at the commencement of the contract in December 2014. That contract does not stipulate that termination by the bank has to be based on any specific reason.
The bank communicated to Taliesin via letter sent earlier this month that it had detected "signals" of integrity issues associated with a Housing Foundation project for which the company was a subcontractor. As such, the bank, for which integrity is a major tenet, opted to enforce the early termination clause of the contract.
Tromp, based on confidentiality regulations, could not divulge the findings of the investigation or state what actions would be taken by the bank as the foundation's supervisor. However, he said the bank had "received indications" from the investigation that there might be some issues that put the contractor's integrity into question.
Asked why the integrity issues at the finance foundation had not been spotted earlier, Tromp said the investigation had been out after the bank had received information about issues at the foundation as well as indications from press reports.
The bank supervises some 200 financial institutions and conducts an in-depth investigation into each every three years. All institutions submit reports to the bank on a daily, weekly and monthly basis depending on their stipulations.
As for Taliesin, the company and its owner underwent integrity screening at the time the contract was awarded and no issue was found at that time.
The investigation at the finance foundation was outside of the regular three-year check-up and was well within the Central Bank's purview to execute based on occurrences at the foundation.
Taliesin was notified on April 13 that the bank would end its contract with the company for the renovation of the Central Bank building on W.J.A. Nisbeth Road as of April 17. The company and its attorney Roland Duncan called a press conference at the job site on April 14 to announce it was placing a "mechanic's lien" on the property for outstanding payments.
Tromp refuted Taliesin Managing Director Carl Critchlow's claim about two outstanding invoices. The company is yet to submit its last two invoices for work carried out on the building prior to the termination of the contract. As the invoices were never submitted, the "mechanic's lien" was "not valid," Tromp said.
The bank's offer to pay NAf. 520,000 at the termination of the contract is based on an agreed-on "formula" for early termination that is outlined in Taliesin's contract.
Tromp also refuted Critchlow's statement that the bank's ending the contract and claims of signals of integrity issues had damaged Taliesin's reputation and business. Tromp said the bank had issued no statement or comments on the end of the contract prior to Monday's press conference, while the contractor had done so.
Tromp also batted down Critchlow's claim of "political influence" playing a part in the ending of the contract. There has been "no political influence – directly or indirectly – in the bank's decision," said Tromp.
Work on the Central Bank building will recommence with a new contractor within "a matter of weeks." The bank wants to make the changeover to a new contractor as brief as possible. It also intends to continue its contracts with subcontractors already associated with the project.
The subcontractors, to date, do not have any integrity issues and were not associated with or carried out work for the housing foundation.
Taliesin is expected to file a case in court against the Central Bank for termination of the contract for the renovation and for a payout of NAf. 3.7 million to cover damages and payment to employees. Some 14 workers are employed on the project, six subcontractors and Taliesin's in-house staff.