Firm in drug bond scandal fails to get $120M from Govt

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A lawsuit filed by Linden Holdings Incorporated, a company linked to local businessman Larry Singh, a People National Congress (PNC) financier, in which he claimed that he was owed $120 million by the Government for the rental of a bond at Sussex Street, Georgetown was recently dismissed by High Court Judge Nareshwar Harnanan.

The claim surrounds the controversial bond at Lot 29 Sussex Street, Georgetown, which was rented in 2016 for $12.6 million per month by the previous APNU/AFC Government to store drugs and pharmaceuticals. On October 31, 2016, after much public outrage over the rental, the Health Ministry wrote the company terminating the tenancy and informed that it will give up possession of the bond on November 1, 2017.

On October 3, 2017, the ministry again wrote to the company reminding it of the earlier notice of termination and reiterated that it would be giving up possession of the property on November 31, 2021.

Through its Attorney-at-Law, Linden Holdings Inc, informed the Health Ministry that it had not received the notice of termination. The company also informed that it did not recognise the ministry as being lawfully entitled to give up possession of the premises.

As such, the company said that if the ministry gives up possession of the bond it will nevertheless claim for rents payable for the unexpired term of the tenancy.

The Health Ministry give up possession of the bond until August 2018 in keeping with the letters it had dispatched to the company. Linden Holdings Incorporated later filed a lawsuit seeking $126 million as the total rent, which would have been payable for the full term of the tenancy up to June 30, 2019.

In dismissing the lawsuit, Justice Harnanan held that the notice to give up tenancy was properly served by the Health Ministry.

In light of the foregoing, the judge ruled that the tenancy was properly terminated and, in the circumstances, the court had no jurisdiction to hear the claim as at all material times, the ministry had been a statutory tenant.

That being the case, the Judge said that the claim for outstanding rent ought to have been filed in the Magistrates’ Courts and not the High Court. The company was represented by Glenn Hanoman and Joshua Abdool, while the Attorney General and Central Broad of Health were represented by Andrew Pollard, SC, and Solicitor General Nigel Hawke.

The multi-million-dollar transaction for the bond came to light in 2016 during the consideration of Financial Papers in the National Assembly. At that time, it was discovered that $25 million was already spent as a security deposit, in addition to $12.5 million, representing monthly rentals from August to December 2016.

Heavy criticisms led former President David Granger to set up a Cabinet sub-committee to investigate the matter and make recommendations.

That committee concluded that the contract should be terminated or re-negotiated, since a similar facility could have been found at a cheaper rate. The Audit Office of Guyana was also called in to conduct a special audit on the Sussex Street, Georgetown bond. The audit found that there were clear breaches of the Procurement Act and recommended that the Police and Legal Affairs Ministry be called in to take the appropriate steps where necessary.