News

Stewart unhappy but accepts magistrate's decision to free accused

BY DESMOND ALLEN Executive editor - special assignment allend@jamaicaobserver.com

Sunday, June 08, 2014    

Print this page Email A Friend!


GORDON 'Butch' Stewart, the chairman of Gorstew -- his holding company which filed complaints against three former Appliance Traders Limited (ATL) executives leading to the near 15-month pension fraud trial -- has accepted the magistrate's decision to free them.

"I'm obviously disappointed at the out-turn of the case, but we are a country of laws and not men, and I accept the decision of the magistrate," Stewart said in an interview with the Jamaica Observer of which he is founder and chairman.

But he noted that the magistrate had upheld his contention throughout that the former executives had distributed $1.7 billion in pension fund surplus without Gorstew's consent.

"Had consent been sought and given, or had there been an admission that no consent had been given for the distribution, none of this would have happened," the business mogul said.

Stewart said he established the ATL pension scheme because: "I wanted to ensure that the people who worked with me to build this successful group of companies would not go home empty-handed when they retired."

That emotional attachment might help to explain the series of events that resulted in the dramatic arrest and trial of Patrick Lynch, former chairman of the pension fund; Catherine Barber, whom Lynch hired as general manager of the fund; and Dr Jeffrey Pyne, the former managing director of Gorstew. The three were accused of conspiring to deceive that consent was given for the surplus distribution.

Stewart, at the outset, said that had the founder's consent been sought to make the pension payout, he would have had the opportunity to have the surplus invested in such a way that it would have brought bigger returns for the pensioners who were "being savaged by brutal inflation and devaluation of the Jamaican dollar".

The entire affair had its genesis in an innocuous way.

In 2010, Lynch signalled he was ready to retire as Stewart's key finance director and as chairman of the pension fund. Stewart decided that the new pension fund chairman should have a clean slate to begin with and so ordered a tidying-up audit of the fund by the highly reputable PricewaterhouseCoopers (PwC) firm.

PwC auditor Carol Bell-Wisdom reported she had not found anywhere on the files that the necessary consent that the Pension Fund Trust Deeds required for distribution of surpluses done in 1998, 2002, 2005, and 2008.

David Davies, chief financial officer at the time, reported the news to Stewart, who nearly hit the roof when he did and immediately summoned Lynch to his office.

This was December 15, 2010. It was 10 days to Christmas and the traditional Yuletide decorations lit up the 35 Half-Way-Tree Road ATL premises. But the atmosphere inside Stewart's office was so frosty it might as well have been snowing.

Stewart asked Lynch if he had known that consent was necessary for the distribution and he responded 'no'. Lynch conceded that, in that event, the distribution would therefore have been ultra vires. Stewart told him to have it reversed, convinced he could do better for the members than merely distributing the surplus.

After the meeting, Lynch called the pension fund lawyer, the veteran and highly regarded attorney, Trevor Patterson. He asked Patterson how he could reverse the distribution because no consent had been given. That wasn't possible, Patterson advised. Could he wind up the fund? Again Patterson said 'no', suggesting that that would be calamitous.

At the follow-up meeting the next morning, Catherine Barber was called to the office and turned up with four consent letters covering the relevant years, all signed by Dr Pyne, who had been asked to resign seven months earlier. They were signed in the same ink and on paper which appeared brand new.

On December 17, counsel for Gorstew, Dmitri Singh, on Stewart's instructions, took the letters to forensic document analyst Erich Speckin in Florida, USA, where they were tested and brought back to Jamaica that same day. In his report later, Speckin said he had found that the letters appeared to have been stacked one on top of the other and signed, noting that the signature on the 1998 letter appeared on the 2002 letter which would not yet have been in existence in 1998. He also suggested that there were signs of attempts to age the paper.

Gorstew reported the matter to the police Organised Crime Division, headed by Senior Supt Fitz Bailey, which eventually charged the three with conspiracy to forge four letters to show that consent had been given for the pension surplus distribution.

Early in the trial, which began in April 2013, the prosecution successfuly brought an application for a change in the indictment "as a matter of clarity", because wording in the original indictment in relation to the four fraud counts among 16, "suggests that the accused conspired to cause the complainants to lose the millions of dollars of surpluses distributed".

"...That is not the prosecution's case, as it is the dishonest deception by means of the four letters in question which is the foundation and thrust of the prosecution's case," argued Garth McBean, one of the prosecuting attorneys, in making the application for amendment.

On June 3, 2014, Senior Magistrate Lorna Shelly Williams upheld no-case submissions in favour of the three ATL accused, saying that the prosecution had not produced sufficient evidence to prove fraud or dishonesty. But she ruled also that the accused did not receive consent for the distribution.

Appearing for the prosecution were: RNA Henriques, QC, lead prosecutor; Garth McBean; Raymond Clough; Hugh Wildman, who replaced Gayle Nelson; and Miguel Williams. For the defence were: Frank Phipps, QC, supported by Katherine Phipps representing Lynch; KD Knight, QC, supported by John Junor for Dr Pyne, and Deborah Martin for Barber.

ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT

Poll

Do you think the current Enquiry will bring any benefit to residents of Tivoli Gardens?
Yes
No


View Results »


ADVERTISEMENT

Today's Cartoon

Click image to view full size editorial cartoon
ADVERTISEMENT