Judge dismisses Brady’s bid to wind up NetServ
SUPREME Court judge, Donald McIntosh, yesterday dismissed a petition by Harold Brady to wind up NetServ Communications Jamaica Limited, the scandal-ridden company that collapsed late last year, taking $180 million of taxpayers’ money down with it.
Brady, a former caretaker for the Opposition Jamaica Labour Party (JLP), had wanted the company to be wound up in order to recover US$18,116.73 for legal services he rendered to the company between October 2000 and August 2001.
However, chartered accountant, John W Lee, who was appointed receiver of the insolvent company on December 11 last year, opposed the petition.
“The petition is of no practical advantage to (Brady) since his claim is unsecured and ranks behind secured and preferential creditors… and the assets are not sufficient to meet the secured and preferential claims as well as the unsecured claims,” said Lee in an affidavit opposing the petition.
NetServ was set up as a private company on August 17, 2000. Its objective was to provide 10,000 jobs over a three-year period under a government initiative administrated by the Ministry of Industry, Commerce and Technology.
But the company folded after it failed to come up with promised equity, despite receiving government loans totalling $180 million disbursed by the National Investment Bank of Jamaica (NIBJ).
According to the debenture which governed the loan, the money was to be used to undertake a project involving the retrofitting of designated factory space with telecommunications infrastructure.
The loan, according to the debenture signed on November 23, 2000 by the directors of NetServ and the NIBJ, was to be repaid in US currency at an annual interest rate of 12 per cent in case of default.
However, after little more than a year in operation, NetServ was declared insolvent, triggering a major government scandal which saw the JLP and a number of other interests calling for the resignation of Technology Minister Phillip Paulwell after it emerged that the money was disbursed in spite of a due diligence report that was less than complimentary to NetServ’s principal, Paul Pereira.
