Firm at centre of CAP contract controversy defends its integrityTuesday, November 23, 2021
BY DASHAN HENDRICKS
Andrew Simpson, the president and founder of CCA Capital Partners — the entity whose latest contract with Clarendon Alumina Production (CAP) has been embroiled in controversy — says there's “nothing improper” about the contracts, adding that his firm gave value for money and has even saved the country millions of dollars.
“I'm hearing a lot of misrepresentation in the public [including]...that my contract value has increased. The contract value that I proposed on October 4, 2021 was a reduction [from] the previous contract,” he told the Jamaica Observer yesterday.
Simpson said the last contract, which was halted by the prime minister last week ahead of Cabinet deliberations yesterday, was valued at US$20,000 per month versus the US$24,000 per month in the previous contract.
He said he was the one who proposed the cost reduction and added that a member of the board asked for him to craft the contract to be task-based, meaning he only gets paid when the work is complete. Simpson declined to say which board member asked him to make the adjustment, insisting that his dealing with the State-owned entity was mainly through the general manager, Shanice Nesbeth.
However, he disclosed that the contract, which he said had been drafted by himself — as all the other contracts with CAP and other clients — went to the board and was approved on November 3. The previous contract expired on October 11.
But Simpson said during the time between the expiration of the last contract and the approval of the current one he continued to execute the terms of the contract, acting on good faith and communications with Nesbeth. He said that work totalled more than 80 hours of meetings at a cost of US$260 per hour.
Addressing the matter of his initial unsolicited approach to CAP shortly after leaving NCB in April 2019, the former banker said, “I would have known CAP from my time at NCB. So, I would have known that CAP had a need, and the need at the time was to raise US$200 million of debt. Now, I have been one of the leaders, or the leader, in the market for fund-raising at the time, in terms of my track record as a banker, prior to forming my company. So, naturally, that would have been a direct push for me to engage on this opportunity, because I know the value that I can bring to the table and that value is oftentimes cheaper than the international companies.”
He pointed out that the standard fee to raise capital ranges between 0.5 per cent and 1.0 per cent of the target amount. That would yield the entity raising the money between US$1 million and US$2 million, plus a retainer. Simpson said he proposed a US$10,000 engagement fee and US$10,000 work fee per month along with a US$35,000 success fee, which was not paid because the transaction did not close, because the Government stepped in last year and repaid debt owing by CAP to its joint-venture partner, the Noble Group.
CAP owns 45 per cent of the Jamalco alumina refinery in Clarendon. The Noble Group owns the other 55 per cent.
He admitted that Dennis Wright, the former deputy chairman of CAP, whom he had as a client when he was at NCB, introduced him to the general manager at the time, and he made a pitch to offer his services to the entity.
“My understanding is that when I joined, there were seven or eight other contracts for various services, and my understanding was that my contract was not handled any different from the seven or eight other contracts that existed,” he said before adding, “CAP is a five-member team, only five employees sit in CAP, managing 45 per cent of a US$500-million refinery. The entity is dependent on professional consultants.”
Simpson said he got the first increase in fees for his services in 2020 when CAP decided to consolidated three contracts from other service providers costing between US$50,000 and US$60,000 per month and his bid was less than one of the three contracts terminated at US$16,000 per month.
He insisted further that there was nothing corrupt in his contract.
“The truth is, I am not affiliated in any way shape or form with anything but morals and integrity. We live by the bloodline of my business based on integrity. Without integrity and morals and confidentiality my business cannot survive. I am not affiliated with any form of immorality or lack of integrity. I am not affiliated in that regard.”
Simpson said his business is based on referrals, and if he did not deliver there would be no referrals for new business.
“I have over US$100 million in mandates now... A lot of the contracts engaged in are based [on past] success,” Simpson added.
He said he knows there are issues among the former board members which will resolve themselves in time, before outlining what his current contract was about.
“We would have done an audit on Jamalco. The audit was completed in my last engagement. There would have been critical findings presented to the board of CAP. In the current contract [that was halted by the PM], that contract was to deep-dive into some of these critical findings... We are in the business of unearthing, we are in the business of due diligence,” he added without going further.
He said if the Cabinet should decide to allow him to continue to perform the duties under the current contract he would do the job.
“I think it is very important to my country... There is a lot to be unearthed from, for example, the audit that we would have done. We did a stage one of the audit and stage two of the audit was supposed to be done in this contract. The deliverables under the contract are a very important exercise to the people of Jamaica, to the taxpayers of Jamaica, it is critical,” he insisted.
He outlined that there were 13 deliverables which were all critical to the taxpayers of this country, including helping Jamalco to recover after the fire which engulfed the refinery in August. That rebuild is expected to cost US$250 million.
“My contract of US$20,000 [per month] is minuscule to the value at risk in relation to, just for example, the fire that burnt down the refinery. Jamalco has a running cost of US$500,000 per day, so it's very critical to get it back to operation quickly,” Simpson argued.
He said, since the fire, the Noble Group has shored up its list of advisors with whom he has been meeting.
“I would be pretty concerned about not having an advisor at this critical time, if I were CAP. CAP is a five-member team with a single executive and the board of CAP is a policy board. So how do you function without a consultant. The consultants on the Noble side are many,” he said.